He also sold calendars to his newspaper customers, and he developed another sideline too. (Location 1619)
Even if an analyst figured everything right, he could still appear wrong in the eyes of the market for the investing equivalent of a lifetime. You had to build in what Graham and Dodd called a MARGIN OF SAFETY—that is, plenty of room for error. (Location 2696)
Graham used all kinds of nifty, effective tricks in his class. He would ask paired questions, one at a time. His students thought they knew the answer to the first, but when the second came along, it made them realize that maybe they didn’t. He would put up descriptions of two companies, one in terrible shape, practically bankrupt, another in fine form. After asking the class to analyze them, he would reveal that they were the same company at different times. Everyone was surprised. (Location 2705)
Along with his Company A and Company B teaching method, Graham used to talk about Class 1 and Class 2 truths. Class 1 truths were absolutes. Class 2 truths became truths by conviction. If enough people thought a company’s stock was worth X, it became worth X until enough people thought otherwise. Yet that did not affect the stock’s intrinsic value—which was a Class 1 truth. Thus, Graham’s investing method was not simply about buying stocks cheap. As much as anything it was rooted in an understanding of psychology, enabling its followers to keep their emotions from influencing their decision-making. (Location 2708)
Of these points, the margin of safety was most important. (Location 2721)
Buffett had always hustled for investors in an understated way, often using others as his promoters—people like Bill Angle and Henry Brandt, who found and prepared prospects— (Location 4456)
They wanted it because Blue Chip had something called “float.” The stamps were paid for in advance; the prizes got redeemed later. In between, Blue Chip had use of the money, sometimes for years. Buffett had first encountered this tantalizing concept with GEICO, and it was part of why he had wanted to own National Indemnity. (Location 5548)
The more he surpassed his own gloomy predictions, the more the legend seemed to grow. (Location 5604)
Good jockeys will do well on good horses but not on broken-down nags. (Location 5822)
you speak any French?” Buffett felt like a poseur. (Location 7339)
Estimate an investment’s intrinsic value, handicap its risk, buy using margin of safety, concentrate, stay in the circle of competence, let it roll as compounding did the work. (Location 8135)
Buffett’s sayings: Rule number one, don’t lose money. Rule number two, don’t forget rule number one. Rule number three, don’t go into debt. (Location 10978)
Buffett always liked to talk about how he would rather step over one-foot bars than look for seven-foot bars to hurdle. The Grab.com lottery deal offered an easy profit—a one-foot bar to step over.1 Ferguson didn’t want to do it because it was such a layup. General Re, he said, only did deals where it had an underwriting edge. (Location 11501)
“People ask me where they should go to work, and I always tell them to go to work for whom they admire the most,” he said. He urged them not to waste their time and their life. “It’s crazy to take little in-between jobs just because they look good on your résumé. That’s like saving sex for your old age. Do what you love and work for whom you admire the most, and you’ve given yourself the best chance in life you can.” They (Location 11764)
“You’d get very rich,” he said, “if you thought of yourself as having a card with only twenty punches in a lifetime, and every financial decision used up one punch. You’d resist the temptation to dabble. You’d make more good decisions and you’d make more big decisions.” (Location 11778)
“Cash combined with courage in a crisis is priceless,” said Buffett. Now (Location 11885)
Kevin Clayton: “We might entertain an offer in the twenty-dollar range.” Buffett: “Well, it’s not likely that we could ever come up with a number that would repay the sweat and time and energy that you and your father have built into this wonderful organization.” Clayton: “Our financing is getting tight. How about if you just lend to us?” Buffett: “That doesn’t work well for Berkshire Hathaway. Why don’t you just throw together whatever you have lying around that tells about your company and send it to me someday whenever you have a chance?” (Location 12134)
“Stocks are the things to own over time. Productivity will increase and stocks will increase with it. There are only a few things you can do wrong. One is to buy or sell at the wrong time. Paying high fees is the other way to get killed. The best way to avoid both of these is to buy a low-cost index fund, and buy it over time. Be greedy when others are fearful, and fearful when others are greedy, but don’t think you can outsmart the market. “If a cross-section of American industry is going to do well over time, then why try to pick the little beauties and think you can do better? Very few people should be active investors.” If (Location 13713)
“Cash combined with courage in a crisis is priceless,” (Location 13960)
