Acționari și parteneri

   Deși formațiunea noastră este corporatistă, atitudinea noastră este de parteneriat. Charlie Munger și cu mine gândim la acționarii noștri ca proprietari parteneri, iar la noi ca parteneri-administratori... Nu vedem compania în sine ca și proprietar al activelor noastre, ci o vedem ca pe un mijloc prin care acționarii noștri dețin activele.

   Directorii executivi trebuie să îmbrățișeze funcția administrativă ca pe un mod de viață și să-și trateze proprietarii ca pe parteneri nu ca pe marionete. Este timpul ca directorii executivi să treacă la acțiune.   Warren Buffett

   Charlie și cu mine sperăm că nu vă vedeți  ca pe un deținător al unei bucăți de hârtie, al cărei preț variază zilnic și care poate fi vândută atunci când un eveniment economic sau politic vă stresează. Sperăm în schimb că vă vedeți ca proprietari parțiali ai unei afaceri în care vă așteptați să rămâneți pe termen nedefinit, ca și cum ați deține o fermă sau o clădire de locuințe împreună cu toți membrii familiei. La rândul nostru, noi nu vedem acționarii Berkshire ca pe membri fără chip ai unei mulțimi în permanentă schimbare, ci mai degrabă ca pe asociați care ne-au încredințat fondurile lor pentru tot restul vieții.

   Într-adevăr, acționarii noștri tratează acțiunile deținute la Berkshire în același fel în care deține o investiție. De exemplu, ca deținători de acțiuni Coca-Cola sau Gilette, să zicem, ne gândim la Berkshire ca la un partener fără rol de administrare în două afaceri extraordinare, măsurându-ne succesul mai mult prin progresul pe termen lung al companiilor decât prin mișcarea de la o lună la alta a valorii lor bursiere. De fapt, nu ne-ar păsa deloc dacă ar trece câțiva ani în care nu s-ar efectua operațiuni și acțiunile acestor companii nu ar fi cotate. dacă avem așteptări poyitive pe termen lung, variațiile de preț pe termen scurt nu au nicio însemnătate pentru noi, cu excepția posibilității de a ne majora investiția la un preț atractiv.

   Charlie și cu mine nu vă putem garanta rezultatele. Dar vă putem garanta că averea voastră financiară va evolua în același ritm cu a noastră, pentru orice perioadă de timp în care alegeți să ne fiți parteneri. Nu suntem interesați de salarii mari sau opțiuni sau alte mijloace de a câștiga un ”avantaj” față de voi. Vrem să facem bani doar dacă partenerii noștri câștigă în exact aceeși proporție. Mai mult, atunci când fac o prostie, vreau să vă puteți consola cu faptul că suferința mea financiară este proporțională cu a voastră.

   Ceea ce vă promitem-alături de alte avantaje mai modeste-este că, pe parcursul participației voastre la Berkshire, veți avea același drum pe care îl avem eu și Charlie. Dacă voi suferiți și noi suferim, dacă noi prosperăm și voi veți prospera. Și nu vom încălca acest legământ introducând acorduri de compensare care să ne ofere o participare mai mare în creșteri decât în descreșteri ale afacerii.

   Deși scopul nostru principal este să maximizăm suma pe care acționarii noștri o culeg, în total, din drepturile lor de proprietate la Berkshire, ne dorim, de asemenea, să minimizăm câștigurile care merg la unii dintre acționari în detrimentul altora. Acestea sunt scopuri pe care le-am avea și dacă am gestiona un parteneriat de familie și considerăm că ele au la fel de mult sens pentru managerii unei companii publice. Într-un parteneriat, corectitudinea solicită ca interesele de participare să fie evaluate în mod echitabil la intrarea și la ieșirea partenerilor; într-o companie publică, corectitudinea prevalează atunci când  prețul de piață și valoarea intrinsecă sunt sincronizate. Evident, idealul nu va fi întotdeauna atins, dar un manager- prin politicile sale și prin comunicare- poate face multe pentru a favoriza echitatea. 

Investment sayings - XI

About simplicity

"We have a passion for keeping things simple." -Charles Munger

"The art of being wise is the art of knowing what to overlook." -William James

"Part of that [having uncommon sense], I think, is being able to tune out folly, as distinguished from recognizing wisdom. You've got whole categories of things you just bat away so your brain isn't cluttered with them. That way, you're better able to pick up a few sensible things to do." -Charles Munger

"Yeah, we don't consider many stupid things. I mean, we get rid of 'em fast...Just getting rid of the nonsense -- just figuring out that if people call you and say, 'I've got this great, wonderful idea', you don't spend 10 minutes once you know in the first sentence that it isn't a great, wonderful idea...Don't be polite and go through the whole process." -Warren Buffett

"The harder you work, the more confidence you get. But you may be working hard on something that is false." -Charles Munger

“Simplicity means the achievement of maximum effect with minimum means.” -Koichi Kawana

“Order and simplification are the first steps toward the mastery of a subject.” -Thomas Mann

“A theory is the more impressive the greater the simplicity of its premises, the more different kinds of things it relates, and the more extended its area of applicability.” -Albert Einstein

“To avoid the various foolish opinions to which mankind are prone, no superhuman genius is required. A few simple rules will keep you, not from all error, but from silly error.” -Bertrand Russell

“There is a master key to success with which no man can fail. Its name is simplicity. Simplicity, I mean, in the sense of reducing to the simplest possible terms every problem that besets us. Whenever I have met a business proposition which, after taking thought, I could not reduce to simplicity, I have left it alone.” -Henri Deterding

“The ability to simplify means to eliminate the unnecessary so that the necessary may speak.” -Hans Hofmann

“There never was a sounder logical maxim of scientific procedure than Ockham’s razor: Entia non sunt multiplicanda praeter necessitatem. That is to say; before you try a complicated hypothesis, you should make quite sure that no simplification of it will explain the facts equally well.” -Charles Sanders Peirce

Charles Sanders Peirce (September 10, 1839 – April 19, 1914) was an American philosopher, logician, mathematician, and scientist, sometimes known as "the father of pragmatism". He was educated as a chemist and employed as a scientist for 30 years. Today he is appreciated largely for his contributions to logic, mathematics, philosophy, scientific methodology, and semiotics, and for his founding of pragmatism.

Koichi Kawana ( born March 16, 1930 in Hokkaido – 1990) native garden designer, college professor, and architect. He has designed gardens in San Diego, Los Angeles, Denver, Colorado, Chicago, Illinois, Memphis, Tennessee, and St. Louis, Missouri. Some of his major works include the Seiwa-en Japanese Garden in the Missouri Botanical Garden and the Japanese Friendship Garden in San Diego's Balboa Park.

Paul Thomas Mann (6 June 1875 – 12 August 1955) was a German novelist, short story writer, social critic, philanthropist, essayist, and the 1929 Nobel Prize in Literature laureate. His highly symbolic and ironic epic novels and novellas are noted for their insight into the psychology of the artist and the intellectual. His analysis and critique of the European and German soul used modernized German and Biblical stories, as well as the ideas of Goethe, Nietzsche and Schopenhauer. Mann was a member of the Hanseatic Mann family and portrayed his family and class in the novel Buddenbrooks.

Warren Edward Buffett (born August 30, 1930) is an American business magnate, investor and philanthropist. He was the most successful investor of the 20th century. Buffett is the chairman, CEO and largest shareholder of Berkshire Hathaway, and consistently ranked among the world's wealthiest people. He was ranked as the world's wealthiest person in 2008 and as the third wealthiest in 2011. In 2012 Time named Buffett one of the world's most influential people.

Charles Thomas Munger (born January 1, 1924) is an American business magnate, lawyer, investor, and philanthropist. He is Vice-Chairman of Berkshire Hathaway Corporation, the diversified investment corporation chaired by Warren Buffett; in this capacity, Buffett describes Munger as "my partner." Munger served as chairman of Wesco Financial Corporation from 1984 through 2011 (Wesco was approximately 80%-owned by Berkshire-Hathaway during that time). He is also the chairman of the Daily Journal Corporation, based in Los Angeles, California, US, and a director of Costco Wholesale Corporation.

Investment sayings - X

About risk

“The risk of an investment is described by both the probability and the potential amount of loss. The risk of an investment—the probability of an adverse outcome—is partly inherent in its very nature. A dollar spent on biotechnology research is a riskier investment than a dollar used to purchase utility equipment. The former has both a greater probability of loss and a greater percentage of the investment at stake.

In the financial markets, however, the connection between a marketable security and the underlying business is not as clear-cut. For investors in a marketable security the gain or loss associated with the various outcomes is not totally inherent in the underlying business; it also depends on the price paid, which is established by the marketplace. The view that risk is dependent on both the nature of investments and on their market price is very different from that described by beta.

While security analysts attempt to determine with precision the risk and return of investments, events alone accomplish that. For most investments the amount of profit earned can be known only after maturity or sale. Only for the safest of investments is return knowable at the time of purchase: a one-year 6 percent T-bill returns 6 percent at the end of one year. For riskier investments the outcome must be known before the return can be calculated. If you buy one hundred shares of Chrysler Corporation, for example, your return depends almost entirely on the price at which it is trading when you sell. Only then can the return be calculated.

Unlike return, however, risk is no more quantifiable at the end of an investment that it was at its beginning. Risk simply cannot be described by a single number. Intuitively we understand that risk varies from investment to investment: a government bond is not as risky as the stock of a high-technology company. But investments do not provide information about their risks the way food packages provide nutritional data.

Rather, risk is a perception in each investor’s mind that results from analysis of the probability and amount of potential loss from an investment. If an exploratory oil well proves to be a dry hole, it is called risky. If a bond defaults or a stock plunges in price, they are called risky. But if the well is a gusher, the bond matures on schedule, and the stock rallies strongly, can we say they weren’t risky when the investment after it is concluded than was known when it was made.

There are only a few things investors can do to counteract risk: diversify adequately, hedge when appropriate, and invest with a margin of safety. It is a precisely because we do not and cannot know all the risks of an investment that we strive to invest at a discount. The bargain element helps to provide a cushion for when things go wrong.”  -Seth Klarman

“While some might mistakenly consider value investing a mechanical tool for identifying bargains, it is actually a comprehensive investment philosophy that emphasizes the need to perform in-depth fundamental analysis, pursue long-term investment results, limit risk, and resist crowd psychology.” -Seth Klarman

“Risk means more things can happen than will happen.” -Elroy Dimson

"We have two kinds of forecasters, those who don't know and those who don't know they don't know." -John Kenneth Galbraith

"It is frightening to think that you might not know something, but more frightening to think that by and large the world is run by people who have faith that they know exactly what is going on." -Amos Tversky

"It ain't what you don't know that gets you into trouble. It what you know for certain that just ain't true." -Mark Twain

“There is a great difference between knowing and understanding: you can know a lot about something and not really understand it.” –Charles F. Kettering

"I have no use whatsoever for projections or forecasts. They create an illusion of apparent precision. The more meticulous they are, the more concerned you should be. We never look at projections, but we care very much about, and look very deeply at, track records. If a company has a lousy track record, but a very bright future, we will miss the opportunity..." -Warren Buffett

"[Projections] are put together by people who have an interest in a particular outcome, have a subconscious bias, and its apparent precision makes it fallacious. They remind me of Mark Twain's saying, 'A mine is a hole in the ground owned by a liar.' Projections in America are often a lie, although not an intentional one, but the worst kind because the forecaster often believes them himself." -Charlie Munger

Seth Klarman (born 1957) is an American billionaire who founded the Baupost Group, a Boston-based private investment partnership, and the author of a book on value investing titled Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor.

Amos Nathan Tversky (Hebrew, March 16, 1937 – June 2, 1996) was a cognitive and mathematical psychologist, a student of cognitive science, a collaborator of Daniel Kahneman, and a figure in the discovery of systematic human cognitive bias and handling of risk. Much of his early work concerned the foundations of measurement. He was co-author of a three-volume treatise, Foundations of Measurement (recently reprinted). His early work with Kahneman focused on the psychology of prediction and probability judgment. Amos Tversky and Daniel Kahneman worked together to develop prospect theory, which aims to explain irrational human economic choices and is considered one of the seminal works of behavioral economics. Six years after Tversky's death, Kahneman received the 2002 Nobel Prize in Economics for the work he did in collaboration with Amos Tversky. (The prize is not awarded posthumously.) Kahneman told The New York Times in an interview soon after receiving the honor: "I feel it is a joint prize. We were twinned for more than a decade."

Investment sayings - VI

“You’ve got to have models in your head and you’ve got to array you experience – both vicarious and direct – onto this latticework of mental models.” - Charlie Munger

“Your life must focus on the maximization of objectivity." -Charlie Munger

“Acquire worldly wisdom and adjust your behavior accordingly. If your new behavior gives you a little temporary unpopularity with your peer group… then to hell with them.” -Charlie Munger

“If it is wisdom you’re after, you’re going to spend a lot of time on your ass reading.” -Charlie Munger

"In my whole life, I have known no wise people (over a broad subject matter area) who didn't read all the time -- none, zero... You'd be amazed at how much Warren reads -- at how much I read. My children laugh at me. They think I'm a book with a couple of legs sticking out." -Charlie Munger

"Warren and I insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think. So Warren and I do more reading and thinking and less doing than most people in business." -Charlie Munger

“The man who doesn’t read good books has no advantage over the man who can’t read them.” -Mark Twain

“Not everything that counts can be counted, and not everything that can be counted counts.” -sign that hung in Albert Einstein’s office at Princeton

"Most of what we say and do is not essential. If you can eliminate it, you'll have more time, and more tranquility. Ask yourself at every moment, 'Is this necessary?" -Marcus Aurelius
"The definition of insanity is doing something over and over again and expecting different results." -Albert Einstein

“If I have seen further [than certain other men] it is by standing upon the shoulders of giants.” -Sir Isaac Newton

“If I am anything, which I highly doubt, I have made myself so by hard work.” -Sir Isaac Newton

“The harder you work the luckier you get.” -Ben Franklin

"More important than the will to win is the will to prepare." -Charlie Munger

“In all things success depends on previous preparation, and without such previous preparation there is sure to be failure” –Confucius

"Hard work, honesty, if you keep at it, will get you almost anything." -Charlie Munger

Marcus Aurelius (Marcus Aurelius Antoninus Augustus;26 April 121 – 17 March 180 AD) was Roman Emperor from 161 to 180. He ruled with Lucius Verus as co-emperor from 161 until Verus' death in 169. He was the last of the Five Good Emperors, and is also considered one of the most important Stoic philosophers. 
Marcus Aurelius' Stoic tome Meditations, written in Greek while on campaign between 170 and 180, is still revered as a literary monument to a philosophy of service and duty, describing how to find and preserve equanimity in the midst of conflict by following nature as a source of guidance and inspiration.

Sir Isaac Newton  (25 December 1642 – 20 March 1726) was an English physicist and mathematician (described in his own day as a "natural philosopher") who is widely recognised as one of the most influential scientists of all time and as a key figure in the scientific revolution. His book Philosophiæ Naturalis Principia Mathematica ("Mathematical Principles of Natural Philosophy"), first published in 1687, laid the foundations for classical mechanics. Newton also made seminal contributions to optics and shares credit with Gottfried Leibniz for the invention of calculus.

Charles Thomas Munger (born January 1, 1924) is an American business magnate, lawyer, investor, and philanthropist. He is Vice-Chairman of Berkshire Hathaway Corporation, the diversified investment corporation chaired by Warren Buffett; in this capacity, Buffett describes Munger as "my partner." Munger served as chairman of Wesco Financial Corporation from 1984 through 2011 (Wesco was approximately 80%-owned by Berkshire-Hathaway during that time). He is also the chairman of the Daily Journal Corporation, based in Los Angeles, California, US, and a director of Costco Wholesale Corporation.

Investment sayings - V

“There is nothing wrong with changing a plan when the situation has changed.” –Seneca 

“Occasions when you can change your mind should be cherished, because they mean you’re smarter than you were before.” -Malcolm Gladwell

“Life is not about waiting for the storm to pass, it is about learning to dance in the rain.” -Unknown

“Discovery is looking at what everyone else sees, and seeing what everyone else misses.” -Kauffman Foundation

“Don't be astonished at new ideas; you know it does not cease to be true because it is not accepted by many.” -Benedict de Spinoza

"The stock market is filled with individuals who know the price of everything, but the value of nothing." - Phil Fisher

"In economics, you always want to ask 'And then what?'" - Warren Buffett

“There is a tide in the affairs of men which, taken at the flood, leads on to fortune.” -Shakespeare

“The first principle is that you must not fool yourself, and you are the easiest person to fool.” -Richard Feynman

"The chains of habit are too light to be felt until they are too heavy to be broken." -Warren Buffett

“The minute you get away from the fundamentals – whether it’s proper technique, work ethic, or mental preparation – the bottom can fall out of your game, your schoolwork, your job, whatever you’re doing.” -Michael Jordan

“Plough deep, while sluggards sleep, and you shall have corn to sell and keep. Work while it is called today, for you know not how much you may be hindered tomorrow. One today is worth two tomorrows, and Never leave that till tomorrow, which you can do today.”

“If you were a servant, would you not be ashamed that a good master should catch you idle? Are you then your own master? Be ashamed to catch yourself idle when there is so much to be done for yourself, your family, and your country. Handle your tools without mittens: Remember, that the cat in gloves catches no mice.”

“It is true, there is much to be done, and perhaps, you are weak handed; but stick to it steadily, and you will see great effects; for Constant dropping wears away stones; and by diligence and patience the mouse ate in two the cable; and little strokes fell great oaks.” -Ben Franklin

“Acquire Riches by Industry and Frugality.” -Ben Franklin

“Your life must focus on the maximization of objectivity." -Charlie Munger

“A few major opportunities, clearly recognizable as such, will usually come to one who continuously searches and waits, with a curious mind, loving diagnosis involving multiple variables. And then all that is required is a willingness to bet heavily when the odds are extremely favorable, using resources available as a result of prudence and patience in the past.” -Charlie Munger

"Ain't only three things to gambling: knowing the 60-40 end of the proposition, money management, and knowing yourself." -"Puggy" Pearson

"Here's one truth that perhaps your typical investment counselor would disagree with: if you're comfortably rich and someone else is getting richer faster than you by, for example, investing in risky stocks, so what?! Someone will always be getting richer faster than you. This is not a tragedy.” -Charlie Munger

“He is a wise man who does not grieve for the things which he has not, but rejoices for those which he has.” -Epictetus

Baruch Spinoza (born Benedito de Espinosa; 24 November 1632 – 21 February 1677, later Benedict de Spinoza) was a Dutch philosopher.The breadth and importance of Spinoza's work was not fully realized until years after his death. By laying the groundwork for the 18th century Enlightenment and modern biblical criticism, including modern conceptions of the self and, arguably, the universe, he came to be considered one of the great rationalists of 17th-century philosophy. His magnum opus, the posthumous Ethics, in which he opposed Descartes's mind–body dualism, has earned him recognition as one of Western philosophy's most important thinkers. In the Ethics, "Spinoza wrote the last indisputable Latin masterpiece, and one in which the refined conceptions of medieval philosophy are finally turned against themselves and destroyed entirely."

Charles Thomas Munger (born January 1, 1924) is an American business magnate, lawyer, investor, and philanthropist. He is Vice-Chairman of Berkshire Hathaway Corporation, the diversified investment corporation chaired by Warren Buffett; in this capacity, Buffett describes Munger as "my partner." Munger served as chairman of Wesco Financial Corporation from 1984 through 2011 (Wesco was approximately 80%-owned by Berkshire-Hathaway during that time). He is also the chairman of the Daily Journal Corporation, based in Los Angeles, California, US, and a director of Costco Wholesale Corporation.

Malcolm T. Gladwell, (born September 3, 1963) is a Canadian journalist, bestselling author, and speaker. He has been a staff writer for The New Yorker since 1996. He has written five books, The Tipping Point: How Little Things Can Make a Big Difference (2000), Blink: The Power of Thinking Without Thinking (2005), Outliers: The Story of Success (2008), What the Dog Saw: And Other Adventures (2009), a collection of his journalism, and David and Goliath: Underdogs, Misfits, and the Art of Battling Giants (2013). All five books were on The New York Times Best Seller list. 

Investment sayings - III

"In our view, though, investment students need only two well-taught courses-How to Value a Business, and How to Think about Market Prices. Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily-understandable business who's earnings are virtually certain to be materially higher five, ten and twenty years from now." -Warren Buffett

"All intelligent investing is value investing -- acquiring more that you are paying for. You must value the business in order to value the stock." - Charlie Munger

“Doubt is not a pleasant condition, but certainty is absurd.” –Voltaire 

"The considerations upon which expectations of prospective yields are based are partly existing facts which we can assume to be known more or less for certain, and partly future events which can only be forecasted with more or less confidence.
It would be foolish, in forming our expectations, to attach great weight to matters which are very uncertain. It is reasonable, therefore, to be guided to a considerable degree by the facts about which we feel somewhat confident, even then they may be less decisively relevant to the issue than other facts about which our knowledge is vague and scanty. For this reason the facts of the existing situation enter, in a sense disproportionately, into the formation of our long-term expectations; our usual practice being to take the existing situation and to project it into the future, modified only to the extent that we have more or less definite reasons for expecting a change.
The outstanding fact is the extreme precariousness of the basis of knowledge on which our estimates of prospective yield have to be made. Our knowledge of the factors which will govern the yield of an investment some years hence is usually very slight and often negligible. If we speak frankly, we have to admit that our basis of knowledge for estimating the yield 10 years hence of a … [business enterprise] … amounts to little or sometimes to nothing; or even five years hence." - John Maynard Keynes

"The strategy we've adopted precludes our following standard diversification dogma. Many pundits would therefore say the strategy must be riskier than that employed by more conventional investors. We disagree. We believe that a policy of portfolio concentration may well decrease risk if it raises, as it should, both the intensity with which an investor thinks about a business and the comfort-level he must feel with its economic characteristics before buying into it." -Warren Buffett

“We believe that almost all really good investment records will involve relatively little diversification. The basic idea that it was hard to find good investments and that you wanted to be in good investments, and therefore, you’d just find a few of them that you knew a lot about and concentrate on those seemed to me such an obviously good idea. And indeed, it’s proven to be an obviously good idea. Yet 98% of the investing world doesn’t follow it. That’s been good for us.” - Charlie Munger

“As time goes on, I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence….One’s knowledge and experience are definitely limited and there are seldom more than two or three enterprises at any given time in which I personally feel myself entitled to put full confidence.” - John Maynard Keynes

John Maynard Keynes, 1st Baron Keynes,CB, FBA (5 June 1883 – 21 April 1946) was a British economist whose ideas have fundamentally affected the theory and practice of modern macroeconomics, and informed the economic policies of governments. He built on and greatly refined earlier work on the causes of business cycles, and is widely considered to be one of the founders of modern macroeconomics and the most influential economist of the 20th century. His ideas are the basis for the school of thought known as Keynesian economics, and its various offshoots. 

Charles Thomas Munger (born January 1, 1924) is an American business magnate, lawyer, investor, and philanthropist. He is Vice-Chairman of Berkshire Hathaway Corporation, the diversified investment corporation chaired by Warren Buffett; in this capacity, Buffett describes Munger as "my partner." Munger served as chairman of Wesco Financial Corporation from 1984 through 2011 (Wesco was approximately 80%-owned by Berkshire-Hathaway during that time). He is also the chairman of the Daily Journal Corporation, based in Los Angeles, California, US, and a director of Costco Wholesale Corporation. 

Warren Edward Buffett (born August 30, 1930) is an American business magnate, investor and philanthropist. He was the most successful investor of the 20th century. Buffett is the chairman, CEO and largest shareholder of Berkshire Hathaway, and consistently ranked among the world's wealthiest people. He was ranked as the world's wealthiest person in 2008 and as the third wealthiest in 2011. In 2012 Time named Buffett one of the world's most influential people.

François-Marie Arouet (21 November 1694 – 30 May 1778), known by his nom de plume Voltaire was a French Enlightenment writer, historian and philosopher famous for his wit, his attacks on the established Catholic Church, and his advocacy of freedom of religion, freedom of expression and separation of church and state. Voltaire was a versatile writer, producing works in almost every literary form, including plays, poems, novels, essays, and historical and scientific works. He wrote more than 20,000 letters and more than 2,000 books and pamphlets. He was an outspoken advocate, despite the risk this placed him in under the strict censorship laws of the time. As a satirical polemicist, he frequently made use of his works to criticize intolerance, religious dogma, and the French institutions of his day.
 

Investment sayings - II

“Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.” - Ben Graham

 “If it’s close, we don’t play.” - Ben Graham 

Either: "In the short run, the market is a voting machine, but in the long run it is a weighing machine." or "the market is not a weighing machine ... Rather should we say that the market is a voting machine ... product partly of reason and partly of emotion." - Ben Graham

 "You don't need to be an expert in order to achieve satisfactory investment returns. But if you aren't, you must recognize your limitations and follow a course certain to work reasonably well. Keep things simple and don't swing for the fences. When promised quick profits, respond with a quick 'no'." - Warren Buffett

“The game of life is the game of everlasting learning. At least it is if you want to win.” – Charlie Munger

“It was never my thinking that made the big money. It was always my sitting. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money.” - Jesse Livermore

"Value investing is risk aversion." - Seth Klarman

"Value investing is at its core the marriage of a contrarian streak and a calculator." - Seth Klarman

“To achieve long-term success over many financial market and economic cycles, observing a few rules is not enough. Too many things change too quickly in the investment world for that approach to succeed. It is necessary instead to understand the rationale behind the rules in order to appreciate why they work when they do and don't when they don't.” -Seth Klarman

"It is better to be roughly right than precisely wrong." - John Maynard Keynes

Seth Klarman (born 1957) is an American billionaire who founded the Baupost Group, a Boston-based private investment partnership, and the author of a book on value investing titled Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor.

Warren Edward Buffett (born August 30, 1930) is an American business magnate, investor and philanthropist. He was the most successful investor of the 20th century. Buffett is the chairman, CEO and largest shareholder of Berkshire Hathaway, and consistently ranked among the world's wealthiest people. He was ranked as the world's wealthiest person in 2008 and as the third wealthiest in 2011. In 2012 Time named Buffett one of the world's most influential people.

Charles Thomas Munger (born January 1, 1924) is an American business magnate, lawyer, investor, and philanthropist. He is Vice-Chairman of Berkshire Hathaway Corporation, the diversified investment corporation chaired by Warren Buffett; in this capacity, Buffett describes Munger as "my partner." Munger served as chairman of Wesco Financial Corporation from 1984 through 2011 (Wesco was approximately 80%-owned by Berkshire-Hathaway during that time). He is also the chairman of the Daily Journal Corporation, based in Los Angeles, California, US, and a director of Costco Wholesale Corporation.

John Maynard Keynes, 1st Baron Keynes,CB, FBA (5 June 1883 – 21 April 1946) was a British economist whose ideas have fundamentally affected the theory and practice of modern macroeconomics, and informed the economic policies of governments. He built on and greatly refined earlier work on the causes of business cycles, and is widely considered to be one of the founders of modern macroeconomics and the most influential economist of the 20th century. His ideas are the basis for the school of thought known as Keynesian economics, and its various offshoots. 

Benjamin Graham (real name Grossbaum) ( May 8, 1894 – September 21, 1976) was a British-born American professional investor. Graham is considered the father of value investing, an investment approach he began teaching at Columbia Business School in 1928 and subsequently refined with David Dodd through various editions of their famous book Security Analysis. Graham had many disciples in his lifetime, a number of whom went on to become successful investors themselves. Graham's most well-known disciples include Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss, among others. Buffett, who credits Graham as grounding him with a sound intellectual investment framework, described him as the second most influential person in his life after his own father. In fact, Graham had such an overwhelming influence on his students that two of them, Buffett and Kahn, named their sons Howard Graham Buffett and Thomas Graham Kahn after him. Graham also taught at the UCLA Anderson School of Management.

 

Investment sayings - I

"An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative." - Ben Graham

 “Rule #1: Never Lose Money; Rule #2: Never forget Rule #1.” -Warren Buffett

“Be fearful when others are greedy, and greedy when others are fearful.” -Warren Buffett

“The less prudence with which others conduct their affairs, the greater the prudence with which we should conduct our own affairs.” -Warren Buffett

"What the wise man does in the beginning, the fool does in the end." -Warren Buffett

"We don't have to be smarter than the rest. We have to be more disciplined than the rest." -Warren Buffett

"We don't get paid for activity, just for being right. As to how long we'll wait, we'll wait indefinitely." - Warren Buffett

"Charlie and I have a number of filters that things have to get through before we'll think about them." -Warren Buffett

“We really can say no in 10 seconds or so to 90%+ of all the things that come along simply because we have these filters.” -Warren Buffett

"It takes twenty years to build a reputation and five minutes to ruin it." -Warren Buffett

"We're emphasizing the knowable by predicting how certain people and companies will swim against the current. We're not predicting the fluctuation in the current." -Charlie Munger

"I think I've been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I've underestimated it." - Charlie Munger

"Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world." - Charlie Munger

"It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent. There must be some wisdom in the folk saying: 'It's the strong swimmers who drown.'" – Charlie Munger

"I could see that I was not going to cope as well as I wished with life unless I could acquire a better theory-structure on which to hang my observations and experiences. By then, my craving for more theory had a long history. Partly, I had always loved theory as an aid in puzzle solving and as a means of satisfying my monkey-like-curiosity. And, partly, I had found that theory-structure was a superpower in helping one get what one wanted. As I had early discovered in school wherein I had excelled without labor, guided by theory, while many others, without mastery of theory failed despite monstrous effort. Better theory I thought had always worked for me and, if now available could make me acquire capital and independence faster and better assist everything I loved." - Charlie Munger

“The number one idea is to view a stock as an ownership of the business and to judge the staying quality of the business in terms of its competitive advantage. Look for more value in terms of discounted future cash-flow than you are paying for. Move only when you have an advantage.” – Charlie Munger

 

Charles Thomas Munger (born January 1, 1924) is an American business magnate, lawyer, investor, and philanthropist. He is Vice-Chairman of Berkshire Hathaway Corporation, the diversified investment corporation chaired by Warren Buffett; in this capacity, Buffett describes Munger as "my partner." Munger served as chairman of Wesco Financial Corporation from 1984 through 2011 (Wesco was approximately 80%-owned by Berkshire-Hathaway during that time). He is also the chairman of the Daily Journal Corporation, based in Los Angeles, California, US, and a director of Costco Wholesale Corporation.

Warren Edward Buffett (born August 30, 1930) is an American business magnate, investor and philanthropist. He was the most successful investor of the 20th century. Buffett is the chairman, CEO and largest shareholder of Berkshire Hathaway, and consistently ranked among the world's wealthiest people. He was ranked as the world's wealthiest person in 2008 and as the third wealthiest in 2011. In 2012 Time named Buffett one of the world's most influential people.