I have always found it easier to evaluate weights dictated by fundamentals than votes dictated by psychology.
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Market prices for stocks fluctuate at great amplitudes around intrinsic value but, over the long term, intrinsic value is virtually always reflected at some point in market price.
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My approach to bonds is pretty much like my approach to stocks. If I can’t understand something, I tend to forget it.
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The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’re got a very good business. And if you have to have a prayer session before raising the price by a tenth of a cent, then you’ve got a terrible business.
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The road to successful investing is paved with independence of spirit, decisiveness, and the courage of one’s convictions.
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While majority opinion can give any market movement considerable momentum that keeps it going in the same direction, majority opinion is inevitably and consistently wrong at turning points.
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The history of the stock market shows many periods of twenty years or more when stock prices ended up precisely where they began.
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The strength of our economy is that it is dynamic and always adapting to changing conditions. That’s our advantage in the world.
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Suppose you bought a stock cheap when it was a relatively obscure situation, and then a half-dozen Wall Street firms started cheering for the stock at the same time. I’d get concerned and think about selling. I don’t like bandwagons. I’d rather do my own thing.
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The very top officers of a company ought to have the equivalent of one year’s salary invested in the company. If they can’t demonstrate such faith in their own ability, why should I?
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If the balance sheet figures look right, I come to the next and hardest part — appraising management.
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We don’t invest for income. If you invest soundly for growth, the income follows.
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I’m an optimist, both as a person and an investor. It’s a big mistake to be pessimistic as long as we have a viable civilization which is reasonably well managed.
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If a company has a sound balance sheet with minimal long-term debt, good growth prospects and responsible management, then the stock should be interesting.
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It makes no sense for individual investors to jump in and out of the market. People who trade in that way rarely die rich, whereas the patient investor often does.
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If managers can’t think of anything else to do with their money they should pay dividends. If they have good places to invest it, that’s much better.
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Change creates opportunities to grow, but it also creates opportunities to slip.
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I have a very simple strategy. I buy good companies at attractive prices. Then I sit on them.
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It’s extremely difficult to figure out when to sell anything. So I’d rather have the stock taken away from me in a merger or a buyout. It’s much easier.
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It’s my job to find unusual companies and then judge whether the price they’re selling at is too high.
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I had a margin call in 1924, and I swore I never would buy on margin again. That’s one of the main reasons I got through the 1930s.
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If you are in the right companies, the potential rise can be so enormous that everything else is secondary.
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Even a great company can be priced too high if there’s a lot of glamour attached to it.
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