The Oracle of Omaha, Warren Buffett, who is undoubtedly the biggest investor in the world, keeps dropping pearls of wisdom in his annual letters and rare interviews. His wisdom usually shared through quotes in his annual Berkshire Hathaway letters, feels like parental hand holding for investors everywhere. For young Indians navigating the unpredictability that is a part of the markets is a tough job. These quotes throw light on a tested path to success. Let’s try and learn from 5 of Buffetts top quotes.
1. “Rule No. 1: Never Lose Money. Rule No. 2: Never Forget Rule No. 1.”
This is one of the most widely known and followed quotes by Warren Buffet, that he shared in his 1983 annual letters to Berkshire Hathaway investors. Here he emphasized the importance of protecting your capital. When one loses money, it sets them back, making it harder to recover than to grow steadily. Think about it… If you lose 50% on a stock, you need a 100% gain on its now down price just to break even. This quote is about securing your investments to ensure there is no monetary losses, before chasing the big gains.
In India, this means avoiding risky bets. For example, the 1999 internet stocks craze where many investors jumped in blind following the herd, lured by stories of 10x to 100x gains, only to lose big when the market crashed in 2000. This quote is a warning against such moves. The whole point is when investing in stocks work hard to avoid losses. And if you get that right, you will be closer to investing success than you have ever been.
2. “It’s Far Better to Buy a Wonderful Company at a Fair Price Than a Fair Company at a Wonderful Price.”
This one is from Buffets 1989 annual letter, which highlights his big shift from buying cheap mediocre businesses to investing in high-quality ones at reasonable or ‘Fair’ prices. This quote says that a “wonderful” company might have a competitive edge—a moat—like strong branding or market leadership, ensuring long-term growth. A fair price in simple words means not overpaying, even for a what could be a superb business. Remember, his other quote? Price is what you pay, value is what you get.
Here is an example for Indian investors to learn this better.
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