Everyone wants to be as successful as billionaire Warren Buffett, but the great man himself has stated over and over that anyone could do it—all it takes is a bit of financial acumen. While there’s not a single easy thing that anyone can do to become like the Oracle of Omaha, these ten quotes will go a long way towards changing your mindset to match that of the great man himself.
1. “Never invest in a business you cannot understand.”
This is probably one of the most overlooked pieces of advice from Buffett, and one that more people need to take into account. It’s impossible to make a good decision on a company that you don’t understand because you’ll miss all of the warning signs of financial trouble, and misunderstand or overlook other important business related to the company. Basically, don’t just invest because it looks good.
2. “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes. Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio’s market value.”
Impulse buying of stocks on the cheap is never a good idea, as quick money is a huge risk. It’s better to buy with the intent to own and profit over a longer period of time. Be patient!
3. “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
Don’t buy something simply because it’s cheap. The whole point of investing is to make money, and you should invest carefully in businesses that you believe in, understand, and value. Price and value are not the same thing.
4. “Our favorite holding period is forever.”
Buy stocks with the intention of keeping them forever and building your portfolio. That’s easily one of the best ways to play the game.
5. “Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.”
Don’t waste energy trying to save a sinking ship or lamenting your losses. Instead, spend your time saving what you can and move on to the next thing. Sometimes a company can’t be saved, and sometimes it just isn’t worth the risk. Holding out isn’t always the best idea.
6. “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.”
When you see an opportunity, don’t be hesitant. Real opportunity doesn’t happen very often and it might not last for long, so jump in and take advantage while you can.
7. “Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”
While it’s important to buy good quality stocks, remember that the whole point of investing is to make money. Towards that end, saving a bit of money on discounted stock is never a bad thing—just don’t get fooled into buying bad stock simply because the price is right!
8. “Rule No. 1 is never lose money. Rule No. 2 is never forget Rule No. 1.”
The whole point of investing is to make money, so you should never lose sight of that. It might be hard as you’ll make friends with company CEOs, but remember that you need to do what’s best for you. That doesn’t mean stabbing people in the back, but it does mean protecting your own interests when you need to.
9. “Successful investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can’t produce a baby in one month by getting nine women pregnant.”
Be patient. The longest payouts are often the most valuable, and that’s where the real secret lies: patience and common sense will go much farther than fast trading and cutthroat deals.
10. “Risk comes from not knowing what you’re doing.”
Get all the facts before you make a decision. You don’t necessarily have to take years on every decision (Buffett certainly doesn’t) but you should always be buying with intention and with an understanding of the risk. Do your research!