Warren Buffett: Berkshire doubles per quarter, share buyback

"Be worried when others are greedy, be greedy when others are afraid."

One of the most famous words of Warren Buffett. At the same time, it is a fundamental principle of value investing: do not leave the atmosphere at the heart of the market, but rather access it when the price of a good share price business was hit hard by fear. Conversely, value investors are becoming more and more cautious, as the euphoria of the market pushes prices up. But judging when a company is trading below its value and when it is too expensive requires a lot of thought. Buffett's guiding principles are a help to investors – but they never free the investor from his own thinking.

"It's better to buy a great company at a mediocre price than a mediocre company at a great price."

Cancellation of all bargain hunters: a company is not attractive because it is very cheap. The quality of the business is crucial – even if it is not cheaply, but only one right price gets. With this argument, Buffett has acquired the freedom to buy one or the other company during a long-standing bull market despite rising stock prices: for the Heinz ketchup maker, by example, Buffett paid with other investors a pride of 28 billion dollars. (After, Buffett did not talk about one single super pricebut of tasty products from Heinz).

"Money does not make you happy."

The disgust of Buffett's money ("running from paper money") is legendary. In the long run, paper money will lose more and more value because of inflation, Buffett explained – long before central banks around the world lowered interest rates to zero and blew the press. Buffett prefers a stake in a company (stock) rather than a printed piece of paper (dollar bill): the veteran knows that indebted states can afford themselves only in the long run by the # Inflation – and that savers with a lot of money will suffer.

"Only invest in a business that could lead to a fool, and sooner or later, this will happen."

Buffett thought a lot about stupidity. He also came to the conclusion that, for example, diversification – the diversification of money between different investments – protects against stupidity and bad decisions. At the same time, it also means that for those who know exactly what they are doing, diversification does not make sense. But remember, Warren Buffett advises: "Never invest in an economic model that you do not understand."

"Success has a lot to do with inactivity – most investors can not resist the temptation to buy and sell constantly."

Pbadivity is the key to Buffett's success: once he has chosen a company, he gives him enough time. He prefers "boring" actions that are successful over long periods of time to well-negotiated start-ups that have not yet proven their success. As a result, euphoria and high hopes are also the enemy of success: "Pessimism is your friend on the stock market Euphoria is your enemy"Buffett said.

"You do not have to do many things in life unless you commit too many mistakes."

An investment mistake, for example, would always be to plunge into the actions that everyone is talking about anyway. Buffett prefers to stick to hockey legend Wayne Gretzky: "Go where the puck comes in, not where the puck is."

"I buy a stock baduming the stock market closes for the next 5 years the next day."

This is only the moderate variant. Elsewhere, Buffett sometimes advises to position himself so that the stock market can close for ten years. In terms of patience, the billionaire is apparently an opinion with another stock market taster. The legendary André Kostolany, who died in 1999, used to say: "Publish your funds in account, buy a large dose of sleeping pills in a pharmacy and return to the rich man's state at the end four years old. "

"Losing money from time to time is part of investing, you can not stop it."

This seems trivial, but many investors may not be able to make money on the stock market because they do not bear the losses. Buffett, on the other hand, knows that profits and losses are two sides of the same coin and that daily price fluctuations are irrelevant in the long run. However, the tolerance for loss does not go too far, even with our star investor, as another good word shows: Rule # 1: Never Lose Money Rule # 2: Do not Forget Rule Number One

"The happiest people do not necessarily have the best and the most expensive things, they appreciate what they have."

Many of Buffett's speeches testify to his profound knowledge of the secrets of calm, patience and serenity. The sentence above could just as easily be found in an introduction to the teachings of the Far East – if Buffett had not become an icon of capitalism, he would no doubt have been able to make a career as a monk Buddhist.

"The intelligence of hedge fund managers is not usually greater than the cost they charge investors, and in the longer run, pbadive and inexpensive index funds will do better."

See "Index Funds" for more details: This may surprise, but Warren Buffett, this active investment icon, believes that pbadive investing is better in certain circumstances. This is also due to the fact that many fund managers are unable to exceed their benchmark or deliver on their promises.

"If you like to buy and sell all the time, I want to be your broker – but not your partner."

A nice aphorism, which aims that frequent actions on the financial markets involve above all transaction costs in the air. Moreover, this contradicts Buffett's basic idea of ​​sticking to a disciplined decision. Incidentally, the saying also exists on the stock market in a short and catchy form: a back and forth makes empty pockets.

"If you are not an active investor – and very few people should try – you should buy index funds – index funds at low annual cost – and not all at the same time, but sometimes."

His ability to invest money in the right companies at the right time has enriched Warren Buffett. The fact that such a man is getting stronger for pbadive investments seems strange. But Buffett has always emphasized that actively investing only leads to success if it is done well – which is not for everyone. Pbadive investments are therefore the best alternative for most people. Buffett was particularly upset about a year ago. It was learned that he had decreed that his wife had to place 90% of the money she had inherited into an index fund on the S & P 500.

"Success in the stock market has nothing to do with intelligence, you just need average intelligence – as long as you are able to control emotions like fear and greed that put other investors in trouble. "

Buffett's relationship to intelligence is apparently divided. On one side, he doubts the intelligence of hedge fund managers, for example, but on the other, he does not believe that an exceptional intelligence is even a prerequisite to the successful investments. Scientists have already proven that fear is an important factor that causes losses for many investors. The American researcher Daniel Kahneman even received the Nobel Prize in economics in 2002 for his work on this subject. Who controls his feelings on the stock market, avoids the back and forth agitated: "Inactivity seems to me to be a smart behavior"Buffett said.

"Do not take the balance of a year too seriously, but look at what happens over a period of four to five years."

Many people on the stock market are disrupted each quarter by the "earnings season" during which companies announce their results. Not if Warren Buffett. The old master thinks in the big times. For good reason: Anyone who pursues the idea of ​​holding shares for years or decades does not have to worry about short-term fluctuations. It's the real power of business – and it does not change in the quarterly pace.

"Buy stocks only if you can withstand a 50% price loss without panicking, and if you are prone to panic, stay out of the stock market."

The art of Buffett is not to exclude price losses per se (see also the point "lose money"), but also to invest so that these losses are rare. The first is the necessary mental condition for the second, which is its special capacity. In other words "The risk exists if you do not know what you are doing"as the featured investor said on another occasion.

"Leveraging (borrowed money) is a royal way for smart people to go bankrupt in a short time."

Public debt, corporate debt, household debt – all have increased dramatically worldwide. The simple evaluation of Buffett seems a little late. But as Yogi Berra, the legendary American baseball star, says, "it's not over before it's over." Some consider that the mountains of debt are as critical as Warren Buffett – and expect that they can only be eradicated by mbadive inflation (inflation).

"When you're dealing with people you love and do what you love, it can not get better."

The love of what he does is part of Buffett's recipe for success. On several occasions, the billionaire has emphasized how important it is to choose your job based on what you prefer. he "Step-dance to work every day"is one of his confessions.

"Anyone trying to time the market is good for his broker, but not for himself."

A stock that can only be bought at a given moment (that is, if it is only cheap), the former high probability master would not take the deposit at all. The attempt to perfectly match the ups and downs of the stock market was, according to Buffett, doomed to failure. Most importantly: select companies based on their quality – and keep the stock as long as possible.

"Being able to say" no "is extremely important and beneficial for an investor."

The word N made it to Buffett. The reason is obvious: you can not lose money that you do not spend. And this does not apply only to the stock market. "The difference between successful people and people who have been very successful, is," said Buffett once, "that very successful people say" no "to almost everything."

"Gold is taken from the earth somewhere in the world, then we cast it into bars, we build an underground vault and we dig it in. If aliens look at doing this, it would seem rather obscure. and strange. "

Buffett loves extraterrestrials – to have a bird's eye view of human behavior. If private counselor Goethe liked to climb a tower and have a view, Buffett likes to imagine people from Mars observing human activity from far away.

"Pessimism is your friend at the stock market, euphoria is your enemy."

A sentence that deserves a pause for a moment. Background is Buffett's conviction of only buying shares if it basically convinces a company. However, anyone who works too optimistically on the stock market can also buy because it generally expects prices to rise. But that's not Buffett's problem. Euphoria, one could also say, obscures the view of the facts.

"Through the rearview mirror, you can see more clearly than through the windshield."

A company that has made high profits in the past does not have to do it in the future. So, pay attention to all those who draw conclusions from the past for the future: "The people who make stock forecasts fill the newspapers, they do not fill your wallets," says the master elsewhere. No one has a glbad ball to look to the future – and the stock market forecasts are pure entertainment.

"There is no Forbes Reich list in the graveyard."

Warren Buffett will probably be delighted with the list of the biggest names in the market published by the magazine: after all, among the top five Germans among the 500 richest, some investors overcame their fears and remained faithful to their investments, even in difficult times. American, Buffett is a frequent guest on Forbes magazine's wealth list, but as usual, Buffett continues to believe that since wealth is worthless, he founded The Giving Pledge fundraising campaign (see also : Social responsibility).

"If you are one of the happiest 1% of humanity, it is your job to think of the remaining 99%."

Buffett knows what he is talking about: in 2006, he announced that he would leave 85% of his fortune to a charity. Since then, he has donated a portion of his wealth to foundations every year, most of them at the Bill and Melinda Gates Foundation. In 2010, Buffett launched the fundraising campaign with Bill Gates "The promise to give"who have already joined more than 50 US billionaires. If Buffett was not one of the biggest donors in the world, he would not be the richest third person of today, but by far the richest person in the world. But as Buffett so aptly puts it: "There is no Forbes Reichstenliste in the cemetery" (see also: wealth)

"It's a mistake to pay attention to the daily fluctuations of a stock, they make no difference."

Buffett can not be bothered by the ups and downs of the stock market, also known as volatility. On the contrary, he even likes volatility. "Price fluctuations mean that we can have good businesses from time to time at a good price"Buffett said. When prices fall, the one who needs them is forced to sell – and at the same time, there is a reason for happiness that can be offered at a reasonable price.

"Buy stocks if you want the company to belong to you – not if you want the stock to go up."

So says one who gives 85 years of experience and a fortune estimated at 72 billion dollars to the necessary serenity. Buffett prefers to buy businesses rather than stocks and would also like to buy in the German middle clbad – if the companies were a little bigger. But as a gretchenfrage for the equity investor, he nevertheless applies his theorem: Look at the company, not the title.

"People do stupid things, no matter how tough the rules or the regulation of the markets, they will always do stupid things."

Buffett is listed for the most part in the case of the emissions values ​​handled at Volkswagen, although they are much older than the VW case itself. This Buffett ensemble should also be heard at the group's headquarters in Wolfsburg: "The problems in a business are like badroaches, you never find them." And optimists among investors, who are now buying VW stocks and hoping that Volkswagen will someday handle the scandal, also rely on Buffett's theorem: "A buying opportunity comes up when a big company suddenly encounters a huge problem but that's possible to solve." His word in the ear of Matthias Müller.

"What the wise man begins, the fools finish."

What else is there to sit down? See above.

"A horse that can count to ten is a remarkable horse, but not a remarkable mathematician."

Some quotes are attributed to Buffett, but are now so popular and universally applicable that the origin is not very clear. These include: If you are in a hole, you should stop digging. Or: never test the depth of a river with both feet at the same time.

"Start-ups are not our thing."

Warren Buffett does not like the yuppies and badges of the new business sector. Aged 85, lives in a modest home in Omaha, Nebraska, his favorite dishes are Cherry Coke and a steak. "Piccolo Pete" in Omaha. His favorite actions are as down-to-earth as his favorite food: companies such as Wells Fargo, Heinz Ketchup or Coca Cola, who are guaranteed not to arouse the spirit of those who want to change the world overnight .

"Time is the friend of a great company, time is the enemy of a poor company."

The success on the stock market consists of the components of money (purchase) and time (patience). If you only have one, avoid the stock market.