Top Warren Buffett Quotes on Investing

Warren Buffett needs no introduction. An American business magnate, investor, and philanthropist, he is widely considered the most successful investor of the 20th century.

Buffett didn't get to where he is today without an in-depth knowledge of the way the market works. After decades of analyzing the investment world, he has developed some great methods and guidelines. He knows how to find quality companies and use their profits to compound wealth over time.

The world's most successful investor is always spot on with his insightful comments on the stock markets.

His investment quotes have inspired millions.

As you begin your own investment journey, take a look at these quotes from Warren Buffett. Learn how to become a better investor with the help of these:

Warren Buffett’s famous quotes

• 'Rule no. 1: Never lose money. Rule no. 2: Never forget rule number 1'

  This is one of the most popular quotes by Warren Buffett and also his most important saying.

  Capital preservation should be the main priority for any investor when deciding to place your money into the market.

  It basically says to not to be stubborn in the market. When you go wrong and once you realise it, simply limit your losses and get out of the position as soon as possible.

• 'Price is what you pay. Value is what you get'.

  In the 2008 letter to the Berkshire Hathaway's shareholders, Warren Buffett wrote,

  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.

  Price and value are two sides of the same coin. Understanding the difference between price and value is the core principle of value investing.

• 'The three most important words in investing are margin of safety'.

  Margin of safety is a concept explained by Benjamin Graham’s seminal book, ‘The Intelligent Investor’. It has been central to the value investing philosophy.

  So much so, the great investor Warren Buffett stated margin of safety might be the most important words in investing. So what exactly does the phrase mean?

  In simple terms, ‘margin of safety’ is the difference between a stock price and its intrinsic worth, or value.

  So if a stock is trading at Rs 70 in the market, and you calculate the company's intrinsic value as Rs 100, you have a margin of safety of Rs 30 (100 minus 70). In other terms, the stock is trading at a 30% discount to the company's intrinsic value.

• 'It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price'

  Buffett is a value investor who likes to buy quality stocks at rock-bottom prices.

  He learned from his mentor Benjamin Graham that the greatest danger comes not from buying at the wrong time, but from buying stocks that ought not be bought at all.

  According to him, the best stocks often suffer smaller losses when the market declines.

• 'Predicting rains doesn't count, building arks does'.

  It's one of his lesser-known quotes. It was in Berkshire Hathaway's annual report for 2001.

  That was one of Berkshire Hathaway's worst years. Buffett admitted he had foreseen certain risks but had not acted to mitigate them. He said that he hadn't converted 'thought into action' and violated his rule.

  The quote tells us to stop trying to predict what would happen in the future. Rather it tells us to start building arks because the flood could come any time unannounced.

• 'If you don't have cash, you don't get to play the next day. It is like oxygen, it is there all the time and if you don't have it for a few minutes, it is all over.'

  Buffett and his partner Charlie Munger have always been advocates of holding cash.

  During the financial crisis of 2008, good quality assets were being sold at frivolous prices due to the liquidity crunch.

  Loads of research suggest that the worldwide economic crisis would have been less severe if markets had liquidity.

  Buffett played a significant role during the great recession, providing capital to companies such as Bank of America and Goldman Sachs.

• ‘We don't have to be smarter than the rest. We have to be more disciplined than the rest. - Warren Buffett.’

  Buffett has given lots of important advice to investors. In this one, he highlights the importance of consistency over smartness.

  Whenever we talk about investing in the share market, we subconsciously want to be the smartest. We can invest in a stock that is best in all aspects and is undiscovered and earn money that no one can.

  But we forget that if no one can, it's because that kind of earning does not exist! We all want windfall gains, but we ignore the power of small regular gains.

  This value investing quote has a lot to do with discipline. Many times, you'll be given the chance to take a different path (than what you would follow). It's at times like these that this quote would come in handy.