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Warren Buffett is one of the most revered investors of all time. And as someone who bought his first stock when he was 11 years old, Buffett has learned a lot over the decades and has dispensed valuable advice to disciples who have tried to emulate his success over the years.
The “Oracle of Omaha” is admired for his career achievements and folksy philosophy when it comes to investing, to the point that there are legions of followers hanging on his every word. Buffett is also a compelling speaker, and there are literally hundreds of quotes that can be used as motivation for any would-be investor.
Here are three such examples of Buffett quotes every investor should live by.
Also see four lessons to learn from Buffett getting rich after 50.
‘We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.’
First written in a 1986 Berkshire shareholder letter but repeated in different variations since, this quote is perhaps Buffett’s most famous. Buffett is the master investor for many reasons, none more important than his temperament. If too many investors get greedy, a stock price skyrockets beyond reason. When they abandon a stock, a smart buy can be had on quality businesses going through a dip.
“You need a temperament that neither derives great pleasure from being with the crowd or against the crowd,” Buffett said.
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‘It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.’
Buffett advises investors to focus on companies with solid fundamentals — those with great earnings, minimal debt and decent management — rather than those with inflated prices owing to hype, and to allow investments to develop and compound over time by holding them for an extended period.
Price is important, of course, but what’s the use of getting a great deal on a company that is destined to fail? “The really great business is one that doesn’t require good management,” he told a crowd at the 1996 Berkshire Hathaway annual meeting. “I mean, that is a terrific business. And the poor business is one that can only succeed, or even survive, with great management.”
‘Don’t ask the barber whether you need a haircut.’
This 1994 annual meeting quote seems simple enough, but investors are an itchy bunch, willing to be swayed by any information provided about a company (often from the company) they’re considering buying into. “I do not understand why any buyer of a business looks at a bunch of projections put together by a seller … or his agent,” Buffett said.
This last quote is important and could be lesson No. 1 for any investor: You have to thoroughly research the companies you plan to invest in to make informed decisions. Furthermore, you should really invest only in something you believe in.
Editor’s note: This article is for informational purposes only and does not constitute financial advice. Investing involves risk, including the possible loss of principal. Always consider your individual circumstances and consult with a qualified financial advisor before making investment decisions.
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This article originally appeared on GOBankingRates.com: 3 Warren Buffett Quotes Every Investor Should Live By