valuebeacon

Quotables

“If you examine returns from the broad stock market indexes over the past one hundred years, it is pretty clear that stocks do better than virtually all other easily accessible asset classes.” – Monish Pabrai

“Price is what you pay. Value is what you get.” – Warren Buffett

“The intrinsic value of any business is determined by the cash inflows and outflows – discounted at an appropriate interest rate – that can be expected to occur during the remaining life of the business.” – John Burr Williams

“If a business does well, the stock eventually follows.” – Warren Buffett

“Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results.” – Warren Buffett

“You’re looking for a mispriced gamble. That’s what investing is. And you have to know enough to know whether the gamble is mispriced. That’s value investing.” – Charlie Munger

“If you are shopping for common stocks, choose them the way you would buy groceries, not the way you would buy perfume.” – Benjamin Graham

“Basically, price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal. At other times he will do better if he forgets about the stock market and pays attention to his dividend returns and to the operating results of his companies.” – Benjamin Graham

“The most realistic distinction between the investor and the speculator is found in their attitude toward stock-market movements. The speculator’s primary interest lies in anticipating and profiting from market fluctuations. The investor’s primary interest lies in acquiring and holding suitable securities at suitable prices. Market movements are important to him in a practical sense, because they alternately create low price levels at which he would be wise to buy and high price levels at which he certainly should refrain from buying and probably would be wise to sell.” – Benjamin Graham

“Capitalists strive hard to capitalize on any opportunity to make outsize profits. The irony is that, in that pursuit, they usually destroy all outsized profits. But every once in a while a business with a secret sauce for enduring outsize profits emerges.” – Monish Pabrai

“In business, I look for economic castles protected by unbreachable moats.” -Warren Buffett

“It’s the ability of a business to have some time of an enduring competitive advantage that allows it to earn a better than average rate of return over an extended period of time….what you want is a business that has a deep moat with lots of piranha in it that is getting deeper by the day. That’s a great business.”- Monish Pabrai

“I saw firsthand that the durability of technology moats is many times an oxymoron.” – Monish Pabrai

“At Berkshire we have three buckets: yes, no and too hard.” – Charlie Munger

“There are thousands of publicly traded companies in the U.S. and around the world to choose from. If I look at a given public company, in the first three or four minutes of preliminary analysis, I would put it in one of three buckets. Either I would say that, ‘Yes, this is worth drilling down because it is a business that I either understand very well, or it is something that I can get my hands around fairly quickly.’ Alternatively, it is ‘no’, because it is something that is just outside the circle of competence. Or, in some cases, it is too difficult. I would say that probably 99% or more of businesses I look at go into the ‘No’ or ‘Too Difficult’ pile and very few businesses make it through, so to speak, the first three-minute filter into saying that, ‘Yes, there are attractive fundamentals here. Let us drill further down.’ So the first cut is basically one where you just ask yourself a few honest questions about how well you understand the business, or whether there is a basis to get to a valuation in the future, and ultimately if it is a predictable business.” – Monish Pabrai

“Charlie Munger likes to say that you don’t make money when you buy stocks. And you don’t make money when you sell stocks. You make money by waiting. And so the biggest, the single biggest advantage a value investor has is not IQ; it’s patience and waiting. Waiting for the right pitch and waiting for many years for the right pitch.” – Monish Pabrai

“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

“I think that, every time you saw the word EBITDA [earnings before interest, taxes, depreciation and amortization], you should substitute the word “bullshit” earnings.” – Charlie Munger

“Beta and modern portfolio theory and the like – none of it makes any sense to me.” – Charlie Munger

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  1. Wise observations

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