Warren Buffett, CEO of Berkshire Hathaway is easily one of the most recognizable and reputable investors of all time. Many people utilize his strategies today and he is often quoted. Buffett was the first person I studied at University and I read several articles, interviews, and books written by and about him.
Today, I’m going to share with you 10 famous Warren Buffett quotes and explain to you what they mean and how to apply these quotes to your investing strategy. Read more for Warren Buffett quotes explained
“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years”
This is probably one of my favorite Warren Buffett quotes. Essentially, he’s saying that you should only buy a company that you could hold for long term. Sometimes the market fluctuates or we go into a recession and the stock is down from where you bought it. Before you buy a stock, make sure you are okay with holding it for a long period of time. In addition, make sure it’s a company that can adapt to changing as I guarantee today won’t be the same as in 10 years.
“Don’t watch the market closely,” Buffett said during a wild bout of market volatility back in 2016.
The stock market is addicting to watch. However because there is so much volatility it can cause a rollercoaster of emotions. My best advice is to buy a stock and then don’t look at it for a while. I know it may seem hard, but this is what causes panic selling.
“I always knew I was going to be rich,” he said. “I don’t think I ever doubted it for a minute.”
This is another one of my favorite Warren Buffett quotes. Basically he is saying believe in yourself. He never doubted for one second his abilities and you shouldn’t either. Believe in yourself and you can accomplish anything.
“Risk comes from not knowing what you’re doing”
Risk comes from not knowing what you’re doing is a powerful Warren Buffett quote. He is saying that the investments you make in life don’t have to be risky if you know what you are doing. If you understand the stock market, the risk of investing goes down. If you understand the housing market the risk of buying a property goes down. Another great example is if you understand the risk of credit cards, then there is no risk at all if you pay off your balance every month. There are so many different risk reward businesses or investments this can be applied too.
“You cannot make a good deal with a bad person”
In short, Warren Buffet is saying know who you are going to do business with. If your partner did something bad to his previous business partner what makes you think he won’t do it to you? Surround yourself with good people.
“Only invest in ‘simple businesses’ that you understand”
This is one rule I follow closely. It states invest in companies you can understand. Why try to invest in something you don’t understand? Ready to start investing? Read this article first!
“‘The difference between successful people and really successful people is that really successful people say no to almost everything'”
I can’t stress enough how important it is to be able to say no. I’m approached all the time with offers and jobs that on paper look great, but it will take me off course. I’ve learned how to say no to these positions so I can advance on my path.
“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”
When you see people start to be greedy back away, nothing good can come from it. When you see people reacting out of fear, (coronavirus, housing crisis, etc) be greedy. While everyone else is panicking and selling stocks you should be looking at buying at a discounted price.
“It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction.”
This is a quote I live by, surround yourself with people who are better than you and smarter than you. Build your network around you of strong, smart, talented people. By doing this, it will help you stay motivated, strive to be better, and offer good advice to you when needed.
“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
In this quote Warren Buffett is talking about starting something today not tomorrow but today. When you start a company, product, side income you will be thanking yourself in the long term. Businesses, and even side incomes can take a while to build and start generate real income so it’s better to start today.
Finally my last quote is one of my favorites, ‘Rule No. 1: Never lose money. Rule No. 2: Don’t forget rule No. 1’ With that I am signing off for today. I hope this article gives you a little insight on some of Warren Buffett’s famous quotes. Above are Warren Buffett quotes explained.
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