For Christmas 2008, my girlfriend now wife got me a great gift, she purchased “The Snowball” for me. For those who don’t know about this book, “The Snowball” is an 800-page plus memoir about Warren Buffett. In this book, Buffett with insurance analyst turned writer Alice Schroeder recounts Buffett’s opinions, struggles, triumphs, and in some cases, his fascinating idiosyncrasies that have made him one of the most iconic and revered investors the world has ever known. Weaving back and forth in time throughout the book, “The Oracle of Omaha” takes readers on a lengthy and diverse journey from Buffett’s grassroots to adolescence to the birth of Berkshire Hathaway and decades beyond, almost up to present day.
In walking by this book on our shelf the other day, I thought it would be a good idea to post some of my favourite Buffett quotes and excerpts from “The Snowball”, quotes that really hit me (not literally mind you…) when I read the book. I hope you enjoy my favourite quotes below and if you’ve read “The Snowball”, I’d be curious to know what your favourite parts are too (quotes, excerpts, other). Enjoy!
When speaking at Sun Valley in 1999 about the technology boom and what he thought of it and the dot-com companies driving the boom and major market gains…
“In the short run, the market is a voting machine. In the long run, it’s a weighing machine. Weight counts eventually. But votes count in the short term… Unfortunately, they have no literacy tests in terms of voting qualifications, as you’ve all learned.”
“It’s wonderful to promote new industries, because they are very promotable. It’s very hard to promote investment in a mundane product.”
When reflecting about what has made him such a great investor; a deep toughness about financial decisions and an emotional detachment from what others thought about him…
“The big question about how people behave (and invest) is whether they’ve got an Inner Scorecard or an Outer Scorecard. It helps if you can be satisfied with an Inner Scorecard. I always pose it this way. I say ‘Lookit. Would you rather be the world’s greatest lover, but have everyone think you’re the world’s worst lover? Or would you rather be the world’s worst lover but have everyone think you’re the world’s greatest lover?’”
When reflecting about three main principles he learned from Ben Graham, his mentor, professor and long-time friend at Columbia University…
“A stock is the right to own a little piece of a business.”
“Use a margin of safety, it ensures that good decisions are not wiped out by errors.”
“Mr. Market is your servant, not your master.”
When describing his views about borrowing money for investing…
“It is a big mistake to have lots of financial obligations and no cash reserve…personally, I have never used more than twenty-five percent borrowed money in my life, including when I had only $10,000 and had ideas that made me wish I had $1,000,000.”
When asked about his life philosophy…
“Life is like a snowball. The important thing is finding wet snow and a really long hill.”
I hope you enjoyed my favourites from “The Snowball”!
As always, your comments and contributions are welcome.
