In that spirit, I've selected four quotes from Warren Buffett, chairman and CEO of Berkshire Hathaway, that contain especially important lessons for the beginning investors.
Buffett, who started investing when he was 11 years old, has long been viewed as an investing duration, and he's one of the world's greatest investors.
He believes in buying great businesses and holding them for the long time, and his investing methodology has helped grow the share price of Berkshire Hathaway from just over $11 in 1962 to more than $193,000 today.
1. On the power of time
Time is the friend of the wonderful business, the enemy of the mediocre.
In his 2001 letter to shareholders, Buffett wrote, "You only find out who is swimming naked when the tide goes out." Similarly, when times get tough, we can often recognize truly great businesses.
The challenge is to build a portfolio made up of the best companies! Great businesses can expand and grow for many years, rewarding investors in the process.
This is especially true for young investors who have many years to invest and reap the benefits of compounded returns.
2. On buying and holding
In fact, when we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.
We are just the opposite of those who hurry to sell and book profits when companies perform well but who hang on to businesses that disappoint.
3. On looking to the future
Focus your investing energies on identifying quality businesses of which you would like to be a co-owner for many years.
4. On keeping your cool and avoiding the herd
These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.
Buffett, who started investing when he was 11 years old, has long been viewed as an investing duration, and he's one of the world's greatest investors.
He believes in buying great businesses and holding them for the long time, and his investing methodology has helped grow the share price of Berkshire Hathaway from just over $11 in 1962 to more than $193,000 today.
1. On the power of time
Time is the friend of the wonderful business, the enemy of the mediocre.
In his 2001 letter to shareholders, Buffett wrote, "You only find out who is swimming naked when the tide goes out." Similarly, when times get tough, we can often recognize truly great businesses.
The challenge is to build a portfolio made up of the best companies! Great businesses can expand and grow for many years, rewarding investors in the process.
This is especially true for young investors who have many years to invest and reap the benefits of compounded returns.
2. On buying and holding
In fact, when we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.
We are just the opposite of those who hurry to sell and book profits when companies perform well but who hang on to businesses that disappoint.
3. On looking to the future
Focus your investing energies on identifying quality businesses of which you would like to be a co-owner for many years.
4. On keeping your cool and avoiding the herd
These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.
