The Best Warren Buffet Quotes to Live By in 2021
Warren Buffett is an absolute icon in the world of investment. Aside from making a lot of money through incredible investment decisions, he has also dished out some incredible investment advice over his illustrious life and career. Warren Buffet is a charismatic speaker as well. His quotes on life, investing, success, leadership, emotion, and money are recognized across the world. Warren Buffet is also a man who has walked his talk. He has amassed a wealth of $84.6 billion (as of 2020) and become one of the richest people in the world. The CEO of Berkshire Hathaway lives his life by a certain set of values and beliefs, and makes investment and other life decisions based on that. A look through some of his quotes portrays a great insight into his investment approach. In this post, we will take a look at some of the best Warren Buffet quotes of all time. They are bound to be inspirational, let’s get started.
Best Warren Buffet Quotes
Warren Buffett Quotes on Investing
He only has two big rules of investing
“Rule No. 1: Never lose money. Rule No. 2: Never forget rule No.1” – Warren Buffett
It is possible for the stock market to price things wrong! You can find wonderful businesses on sale often.
Buffett has this famous quote to say about the stock market,
“Remember that the stock market is a manic depressive.”
For any consumer of daily financial news, this will ring true. Equity markets swing wildly from day to day on the smallest of news, rally, and crash on sentiment, and celebrate or vilify the most inane data points. It’s important not to get caught up in the madness but stick to your homework.
Always stay rational.
The Warren Buffet Rule
Never lose money. Stay rational and stick to your homework when researching businesses in which to invest.
The Market Can Wrongly Price Stocks
“Price is what you pay. Value is what you get.”
In other words, don’t focus on short-term swings in price, focus on the underlying value of your investment.
“Beware the investment activity that produces applause; the great moves are usually greeted by yawns.”
From a man who has made a fortune on companies like Apple, American Express, General Motors, UPS, Johnson & Johnson, Mastercard, and Walmart, this is sage advice.
Aim for high returns with low risk
“Risk comes from not knowing what you are doing.”
The advice here is obvious but often forgotten, particularly after investors have had some success. The temptation to believe that success in one area you know well allows you to easily analyze another is much greater once you’ve had some good returns, but should be resisted with vigor. Buffett himself has kept out of the technology sector for the most part, given his lack of knowledge of the sector. Buffett said it best:
“Never invest in a business you cannot understand.”
Learning from the past is very important
“In the business world, the rearview mirror is always clearer than the windshield.”
Invest in the company, not the price
“It’s far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.”
This famous Buffett quote is very interesting, as frequently, “value investors” will pass on anything that they cannot get for a deeply discounted price. Berkshire Hathaway has taken a different approach and instead focused on investing in the right companies. This was one of Buffett’s early lessons as a value investor, famously told as his turn away from “cigar-butt investing.”
“If a business does well, the stock eventually follows.”
“Time is the friend of the wonderful company, the enemy of the mediocre.”
Invest in companies that you understand
“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.”
Here’s a video that showcases 10 more pieces of investment advice from Warren Buffett, a lot of which has to do with only buying companies that you understand:
Invest In Companies That Match Your Values
“Why not invest your assets in the companies you really like? As Mae West said, ‘Too much of a good thing can be wonderful.”
Always invest for the long term
“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
Here is a video about Warren Buffett’s advice for developing a long-term investing strategy:
Patience is critical
“Calling someone who trades actively in the market an investor is like calling someone who repeatedly engages in one-night stands a romantic.”
“The stock market is designed to transfer money from the active to the patient.”
Don’t be impatient when it comes to your money…
Long-Term Investments are better than Short Term Ones
“If you aren’t thinking about owning a stock for 10 years, don’t even think about owning it for 10 minutes.”
Investing is not trading and has a vastly different goal, like trading, when done well, is about taking measured risks for discrete periods of time at sufficient volume as to generate profits, and typically involves wild swings in profitability. Investing is about minimizing risk to generate wealth over the long term, not generating short-term profits.
If Warren Buffett had to choose how long to own a company for, it would be this:
“Our favorite holding period is forever.”
Another great Buffett quote in this vein:
“An investor should act as though he had a lifetime decision card with just twenty punches on it.”
This quote is basically saying that you should never buy businesses with the intention of selling them. If you could only buy 10 or 20 stocks in your entire life you’d probably be a lot more careful with where you invest. You’d spend more time looking at the company, and you’d make sure you really love it.
Investing is easier than what many people make it out to be
“The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective.”
So many of his investing strategies focus on simplifying the process to make sound decisions. For example, he is a fan of using the Rule of 72, which lets you figure out how long it takes for an investment to double without using a calculator.
“There seems to be some perverse human characteristic that likes to make easy things difficult.”
Buffett has made the point that you don’t have to be a genius to be a good investor, but there is a lot of hard work and due diligence involved. There are some basic investing rules that you need to learn, and if you follow those rules, you’ll be successful. Remember to use an investing calculator when the math gets tough, too!
Make Your Own Forecasts
“Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future.”
Diversification isn’t always necessary
“Diversification is protection against ignorance. It makes little sense if you know what you are doing.”
“Wide diversification is only required when investors do not understand what they are doing.”
Seize every opportunity
“Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.”
Believe in America
“We always live in an uncertain world. What is certain is that the United States will go forward over time.”
Warren Buffett has been quoted time and time again saying that America will always prevail. America is the best stock market to invest in and you can be sure that your money will be safe here. Sometimes, it just takes longer than you’d expect.
Warren Buffett Quotes on Success
Surround yourself with the right people
“It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.”
“Of the billionaires I have known, money just brings out the basic traits in them. If they were jerks before they had money, they are simply jerks with a billion dollars.”
Be mindful of your reputation
“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
Doing good work is more importantthan earning good money
“If you get to my age in life and nobody thinks well of you, I don’t care how big your bank account is, your life is a disaster.”
“Basically, when you get to my age, you’ll really measure your success in life by how many of the people you want to have love you actually do love you.”
Always dream big
“I always knew I was going to be rich. I don’t think I ever doubted it for a minute.”
“You only have to do a very few things right in your life so long as you don’t do too many things wrong.”
Be careful with whom you trust
“Honesty is a very expensive gift. Don’t expect it from cheap people.”
Buffett once said that:
“Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.”
In other words, be careful who you trust. Most of the financial “advice” offered by equity analysts, by any range of advisers, and in the media should be taken with a grain of salt. Buffett and his partner have long worked with the same people with whom they have long histories of trust and experience. Any good investor should do the same.
Value your roots
“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
Always give back
“If you’re in the luckiest 1% of humanity, you owe it to the rest of humanity to think about the other 99%.”
It’s ok to say “No”
“The difference between successful people and really successful people is that really successful people say no to almost everything.”
“You’ve gotta keep control of your time, and you can’t unless you say no. You can’t let people set your agenda in life.”
Follow your passion
“In the world of business, the people who are most successful are those who are doing what they love.”
Changing actions will automatically change results
“You know… you keep doing the same things and you keep getting the same result over and over again.”
Choose Your Heroes Wisely
“Tell me who your heroes are and I’ll tell you who you’ll turn out to be.”
“The best thing I did was to choose the right heroes.”
Be wary of bad habits
“Chains of habit are too light to be felt until they are too heavy to be broken.”
Warren Buffett Quotes on Money
It’s better to do nothing than something stupid
“You do things when the opportunities come along. I’ve had periods in my life when I’ve had a bundle of ideas come along, and I’ve had long dry spells. If I get an idea next week, I’ll do something. If not, I won’t do a damn thing.
History doesn’t always dictate the future
“If past history was all that is needed to play the game of money, the richest people would be librarians.”
“The investor of today does not profit from yesterday’s growth.”
Greed is bad
“…not doing what we love in the name of greed is very poor management of our lives.”
Not investing isn’t the right way forward
“Today people who hold cash equivalents feel comfortable. They shouldn’t. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value.”
And finally, the most important investment
Warren Buffett is also a huge proponent of continuous learning and self-education. He’s said in the past that he reads over 500 pages a day. He is always learning and he’s always spending time on personal development. Buffett has this to say about investing in yourself:
“The most important investment you can make is in yourself.”
And remember to think:
“I insist on a lot of time being spent, almost every day, to just sit and think. That is very uncommon in American business. I read and think. So I do more reading and thinking, and make less impulse decisions than most people in business.”