Warren's Mantras

"Rule No. 1: never lose money; rule No. 2: don't forget rule No. 1"

Source: The Tao of Warren Buffett


"Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful."
Source: Letter to shareholders, 2004


"The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities ¾ that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future ¾ will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands."
Source: Letter to shareholders, 2000


"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."
Source: Letter to shareholders, 1989


"The stock market is a no-called-strike game. You don't have to swing at everything--you can wait for your pitch. The problem when you're a money manager is that your fans keep yelling, 'Swing, you bum!'"
Source: The Tao of Warren Buffett


"Wall Street is the only place that people ride to in a Rolls-Royce to get advice from those who take the subway."
Source: The Tao of Warren Buffett


"Long ago, Ben Graham taught me that 'Price is what you pay; value is what you get.' Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down."
Source: Letter to shareholders, 2008


"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ."
Source: Warren Buffet Speaks


"Long ago, Sir Isaac Newton gave us three laws of motion, which were the work of genius. But Sir Isaac’s talents didn’t extend to investing: He lost a bundle in the South Sea Bubble, explaining later, “I can calculate the movement of the stars, but not the madness of men.” If he had not been traumatized by this loss, Sir Isaac might well have gone on to discover the Fourth Law of Motion: For investors as a whole, returns decrease as motion increases."
Source: Letters to shareholders, 2005


"After all, you only find out who is swimming naked when the tide goes out."
Source: Letter to shareholders, 2001


"When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever."
Source: Letter to shareholders, 1988


"Our approach is very much profiting from lack of change rather than from change. With Wrigley chewing gum, it's the lack of change that appeals to me. I don't think it is going to be hurt by the Internet. That's the kind of business I like."
Source: Businessweek, 1999


"Time is the friend of the wonderful business, the enemy of the mediocre."
Source: Letters to shareholders 1989


"The best thing that happens to us is when a great company gets into temporary trouble...We want to buy them when they're on the operating table."
Source: Businessweek, 1999


"I have pledged – to you, the rating agencies and myself – to always run Berkshire with more than ample cash. We never want to count on the kindness of strangers in order to meet tomorrow’s obligations. When forced to choose, I will not trade even a night’s sleep for the chance of extra profits."
 Source: Letter to shareholders, 2008


"I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will."


"Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497."
Source: The New York Times, October 16, 2008


"I am a better investor because I am a businessman, and a better businessman because I am no investor."
Source: Forbes.com - Thoughts On The Business Life

Buy "ME" Pleaaassseeeee ...

I have been reading my earliest postings, some are worth reposting again. This was back in October 2005, gawd its nearly 7 years already, many people would have had two failed marriages within that period of time. The long standing argument of whether we want foreign institutions in our market or not is a good issue to debate. It forces us to think rationally whether we "need" them or not.

To me, its not that we need them, but it is a reflection of the "openness" of our capital markets. Secondly it is also a reflection of the "number of sizable big growth companies" that are attractive enough for them to consider putting into their portfolio. Thirdly, its the "niche exposure that some of our companies avail to international investors", do we have the necessary industry specific companies, that holds sway with international investors. To those ends, we need international investors as a gauge.


What we shouldn't be doing is to attract foreign funds just for the sake of foreign funds. We need not have them telling us what is our worth, we should be better investors ourselves. 


What is this fixation with certain Malaysians that foreign funds MUST/SHOULD buy Malaysian stocks... is it a patriotic kind of thing, somehow "they love us more" if they do,... and if they don't buy, it means "we are not worthy... enough". Get out of the pre-independence, second class citizenry, developing country mentality. Stock markets are just a structure where shares are bought and sold, whether foreign funds come in or not DOES NOT mean we are running companies with "world's best practices/standards" or we are making strong strides in the respective industry's competitive landscape. NO, it does not mean that, one way or another.

People buy stocks if they think it is going to make them money - even if we have very good companies, people might not buy because we might be overvalued already. There are tons of options for the global investors, and Malaysian market is just a little thing. Get over yourself... do you know how big is the Malaysian stock market?? Take just ONE, any one of the top 10 market cap stocks in the US - it is bigger than the total market cap of all 1,000 companies listed in Malaysia. Now we are small, it does not mean we are "nothing", that is the reality. Here we have certain reporters and commentators crying wolf and trying to find hidden motives and agenda for Malaysian stocks NOT being on the radar, .... hey, anyone who blinks will miss the KLSE.


As a matter of fact, foreign funds ignoring smaller markets could be perceived as a good thing! Foreign investors will only but if they think they can make money. If they cannot, maybe the Malaysian stockmarket is fully valued or over-valued... or it could mean that the local funds/institutions and local private investors have "snapped" up all bargains - leaving no room for good stocks to be "under-valued". In other words, we could also argue that when foreign funds/research issue BUY on a certain country - that its because the local funds/institutions and local private investors are NOT SAVVY enough to pick up under-valued stocks. So which is which... a back-handed compliment??!!

It is a good thing to compare our performance with other markets to improve our ways, but don't get emotional about it. Its just stock prices not the price of my self dignity or the price of our children ... get a better perspective. True worth comes from knowing who we are ... we do not need some else outside to tell us that today we are just $1.56...