The 25 Smartest Things Warren Buffett Ever Said

Back in October, shortly after Steve Jobs' death, fellow Fool Morgan Housel undertook the task of piecing together 25 of the wisest things the tech visionary had said throughout his illustrious career. Today, I will attempt to mirror that by looking at 25 of what I deem to be the smartest things Warren Buffett has said throughout his nearly half-century-long career as the head of Berkshire Hathaway (NYSE: BRK-A  ) (NYSE: BRK-B  ) .

The most daunting task wasn't finding 25 memorable quotes -- it was in weeding out an overabundance of intelligence down to "just" 25 of my favorites. Whether you agree with my choices, Buffett's takes on investing, success, and life in general are priceless and worth the price of admission.

25. "If past history was all there was to the game, the richest people would be librarians."

24. "The best thing that happens to us is when a great company gets into temporary trouble. ... We want to buy them when they're on the operating table."

Buffett's recent $5 billion investment in Bank of America (NYSE: BAC  ) speaks well to this statement. Bank of America, though under significant regulatory and global economic pressure, is a long-standing name that's unlikely to go away.

23. "Someone's sitting in the shade today because someone planted a tree a long time ago."

22. "Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results."

21. "Managers and investors alike must understand that accounting numbers are the beginning, not the end, of business valuation."

20. "I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will."

19. "Time is the enemy of the poor business and the friend of the great business. If you have a business that's earning 20%-25% on equity, time is your friend. But time is your enemy if your money is in a low return business."

18. "You only find out who is swimming naked when the tide goes out."

Anyone can pick a winner in a bull market. Picking out winners in a declining market is where true greatness is found.

17. "[The] stock market serves as a relocation center at which money is moved from the active to the patient."

16. "The most common cause of low prices is pessimism -- sometimes pervasive, sometimes specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It's optimism that is the enemy of the rational buyer."

15. "It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently."

14. "Wall Street is the only place that people ride to work in a Rolls Royce to get advice from those who take the subway."

13. "Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac's talents didn't extend to investing: He lost a bundle in the South Sea Bubble, explaining later, 'I can calculate the movement of the stars, but not the madness of men.' If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increases."

12. "You only have to do a very few things right in your life so long as you don't do too many things wrong."

Very key point here. You don't have to be right all the time -- you just have to let your winners ride and cut your losers early.

11. "There are all kinds of businesses that Charlie [Munger] and I don't understand, but that doesn't cause us to stay up at night. It just means we go on to the next one, and that's what the individual investor should do."

10. "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."

9. "Only buy something that you'd be perfectly happy to hold if the market shut down for 10 years."

It's a wonder why Warren Buffett doesn't have to worry about Chinese accounting scandals.

8. "I am a better investor because I am a businessman and a better businessman because I am no investor."

7. "I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over."

Keeping your expectations realistic and in check are important when investing. There's never any shame in making a profit, no matter how small.

6. "Rule No. 1: never lose money; rule No. 2: don't forget rule No. 1."

5. "Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy when others are fearful."

4. "'Price is what you pay; value is what you get."

For a while this probably was my favorite "Buffettism." Even a rock-bottom price is too much if there's little value.

3. "We've long felt that the only value of stock forecasters is to make fortunetellers look good. Even now, Charlie and I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grown-ups who behave in the market like children."

2. "The stock market is a no-called-strike game. You don't have to swing at everything -- you can wait for your pitch. The problem when you're a money manager is that your fans keep yelling, 'Swing, you bum!'"

You never "have" to buy anything. Waiting for the values to come to you will undoubtedly make you a better investor.

1. "When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever."

What better way to end this list than on The Motley Fool ethos of long-term buy and hold being the reason why Buffett is as successful as he's been.

What quotes from the Oracle of Omaha stand out the most to you? Share your thoughts below.

Also, if you're looking for ideas of what stocks the smartest investors are buying, relax. We've got you covered. Download our latest free report, which covers exactly what these investors are buying and why you may want to follow them.

Fool contributor Sean Williams owns shares of Bank of America but has no material interest in any other companies mentioned in this article. He once had an opportunity to have lunch with Warren Buffett but turned it down to help his best friend move. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. The Motley Fool owns shares of Bank of America and Berkshire Hathaway. Motley Fool newsletter services have recommended buying shares of Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (15) | Recommend This Article (48)

Comments from our Foolish Readers

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  • Report this Comment On February 22, 2012, at 2:17 PM, Hairy0524 wrote:

    I don't believe Buffett came up with it, but I liked a quote in this month's Fortune piece on Buffett. "What a wise man does in the beginning a fool does in the end."

    The quote was directed at the argument of gold being a much more sensible and lucrative investment over the next 50 years than stocks.

  • Report this Comment On February 22, 2012, at 5:57 PM, TheDumbMoney wrote:

    Typo in #8. "an" not "no". Nice compilation.

  • Report this Comment On February 22, 2012, at 6:09 PM, snickerdoodle9 wrote:

    Rule #1 : Never lose money

    Rule #2 : Remember rule #1

  • Report this Comment On February 22, 2012, at 7:13 PM, XavHamLap wrote:

    It's not from him but he uses it:

    ''Chains of habit are too light to be felt until they are too heavy to be broken.''

  • Report this Comment On February 23, 2012, at 2:22 PM, midnightmoney wrote:

    What's madness but nobility of soul at odds with circumstance?

  • Report this Comment On February 23, 2012, at 2:23 PM, midnightmoney wrote:

    Loyalty to petrified opinion never broke a chain or freed a human soul

  • Report this Comment On February 23, 2012, at 2:26 PM, midnightmoney wrote:

    Light Turnouts

    August 29, 2011

    Dear ghost, what shelter

    in the noonday crowd? I’m going to write

    an hour, then read

    what someone else has written.

    You’ve no mansion for this to happen in.

    But your adventures are like safe houses,

    your knowing where to stop an adventure

    of another order, like seizing the weather.

    We too are embroiled in this scene of happening,

    and when we speak the same phrase together:

    “We used to have one of those,”

    it matters like a shot in the dark.

    One of us stays behind.

    One of us advances on the bridge

    as on a carpet. Life–it’s marvelous–

    follows and falls behind.

    -John Ashbery

  • Report this Comment On February 23, 2012, at 2:27 PM, ET114 wrote:

    Blah, blah, blah... there are tons of very rich people that have never uttered a word to the media... #1 Buffett likes the attention; love his moral turpitude re: rich should pay more taxes, and has Prez's ear... Hello, Warren, you can more taxes from your 1040 any time, just check the box, and pay more... don't need media and Obama attention to do it... On the investment side, one of his shrewest was the BN Rail buyout, he could care less about the transportation factor, he bought it for the right-of-way, so he can bury fiber optic cable. His buddies at Kiewit and L-3 Communications (Boulder, CO) have the tools and technology. Buffett already owns thousands of miles in fiber, now he's got it all... For you technoids, there will ALWAYS be fiber, period.

  • Report this Comment On February 23, 2012, at 2:28 PM, midnightmoney wrote:

    Diversification being so much the rage 'bout these parts, just thought I'd add a bit.

  • Report this Comment On February 23, 2012, at 2:34 PM, midnightmoney wrote:

    I think I agree with the part of ET114's comment that goes "Blah, blah, blah...". I do hope the fool isn't going to drool over WB for the next two weeks just because his annual letter is coming out. If you want some better reading, try Cormac McCarthy or Bruno Schultz on for size.

  • Report this Comment On February 23, 2012, at 3:39 PM, Hawmps wrote:

    17. "[The] stock market serves as a relocation center at which money is moved from the active to the patient."

    When I read this one I can just hear Cramer... sell, sell, sell...

  • Report this Comment On February 23, 2012, at 3:43 PM, DJDynamicNC wrote:

    "When I read this one I can just hear Cramer... sell, sell, sell..."

    This.

  • Report this Comment On February 23, 2012, at 3:58 PM, DivOnly wrote:

    I like the one something like : "Diversification is for people who don't know what they are buying."

  • Report this Comment On February 23, 2012, at 4:04 PM, HighVoltage627 wrote:

    I'd have to say that my favorite Buffet quote would have to be, "be greedy when otheres are fearful, and fearful when others are greedy."

    It will always probably be my favortie, not because of its perfection. It's my favorite because this quote prompted me, despite my own fears and trepidation, to become an investor. For that reason alone, it wil always have a special place in my heart.

  • Report this Comment On February 23, 2012, at 5:17 PM, vivekjain57 wrote:

    Be Greedy.... is my favourite too. Helps me keep sane at both extremes.

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