Warren Buffett quotes are like golden nuggets of truth on investing and life. After all, how can one of the wealthiest people in the world not have some words of wisdom to share? Known as the Oracle of Omaha, Buffett’s philosophy of value investing, picking stocks that appear to be undervalued and holding them long-term, is a strategy that has helped many investors build their wealth.
The following are Warren Buffett quotes that provide some sage advice for people who are new to investing or more seasoned investors looking for a different strategy that will help improve their portfolio’s performance.
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25 Warren Buffett Quotes
Value Investing
Value investing is a critical strategy that Buffett has always practiced, finding companies considered undervalued or trading below their intrinsic or book value. The search for undervalued stocks certainly isn’t easy and requires extensive research. Investors should look at a company’s financial results and key financial ratios such as the price/earnings ratio, stock market data, etc. to determine a company’s current value and future outlook.
1. “Price is what you pay; value is what you get.”
2. “Whether we’re talking about stocks or socks, I like buying quality merchandise when it’s marked down.”
3. It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
4. “The true investor welcomes volatility…a wildly fluctuating market means that irrationally low prices will periodically be attached to solid businesses.”
Investor Mindset
Buffett’s wise words attempt to impart the importance of having the appropriate investor mindset to achieve success. He encourages investors to focus on the qualities one needs to be a good investor, such as patience and understanding of how to pick good companies to invest in.
Buffett regularly emphasizes that investors only consider companies they thoroughly understand and even use their products or services. Hence, Warren Buffett has many quotes about investor mindset.
5. “Risk comes from not knowing what you are doing.”
6. “Never invest in a business you cannot understand.”
7. “No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant.”
8. “Don’t pass up something that’s attractive today because you think you will find something better tomorrow.”
9. “Why not invest your assets in the companies you really like? As Mae West said, ‘Too much of a good thing can be wonderful.”
10. “Buy a stock the way you would buy a house. Understand and like it such that you’d be content to own it in the absence of any market.”
11. “Keep things simple, and don’t swing for the fences. When promised quick profits, respond with a quick “no.”
12. “All there is to investing is picking good stocks at good times and staying with them as long as they remain good companies.”
13. “You’ve got to understand accounting. You’ve got to. That’s got to be like a language to you.”
High IQ Not Mandatory
Buffett believes that by following his investment strategies, anyone can be successful, not just people who are highly educated or more intelligent.
14. “The most important quality for an investor is temperament, not intellect.”
15. “You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ.”
16. “The business schools reward difficult, complex behavior more than simple behavior, but simple behavior is more effective.”
17. “What we do is not beyond anyone else’s competence. I feel the same way about managing that I do about investing: It’s just not necessary to do extraordinary things to get extraordinary results.”
Long-Term Investing
Buffett believes that investors should never buy shares of a company with the intention of selling them shortly after. With the amount of time investors should be taking to understand and research how a company runs thoroughly and its long-term goals and financial outlook, they should feel confident about owning the company for at least 10 years.
Investors need to control their impulse to sell with market swings. If anything, it may be an opportunity to buy more shares of a company if its outlook is still great and its share price has dropped. Warren Buffett has imparts several quotes about long-term investing.
18. “Time is the friend of a wonderful company, the enemy of the mediocre.”
19. “Our favorite holding period is forever.”
20. “An investor should act as though he had a lifetime decision card with just twenty punches on it.”
21. “Do not take yearly results too seriously. Instead, focus on four or five-year averages.”
22. “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
“If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.”
23. “Calling someone who trades actively in the market an investor is like calling someone who repeatedly engages in one-night stands a romantic.”
No to Diversification
Buffett doesn’t believe in diversification. Buffett believes in owning fewer companies that an investor has thoroughly researched and is confident to invest in for the long term.
24. “Diversification is protection against ignorance. It makes little sense if you know what you are doing.”
25. “Wide diversification is only required when investors do not understand what they are doing.”
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Final Thoughts on 25 Warren Buffett Quotes to Guide Your Investment Strategy
The main takeaway from Warren Buffett quotes is to invest in companies familiar to the investor and to thoroughly research and understand their value, goals, and financial outlook. If the price is right and the shares are even undervalued based on research, be willing to invest in the company for several years. There will be highs and lows, inherent in the stock market, but patience is a key component of Buffett’s investment philosophy.
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Nadia Tahir is a freelance writer and content creator. She mostly writes in the areas of lifestyle and personal finance. She also enjoys writing on her blog about motherhood at This Mom is On Fire.