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Take the probability of loss times the amount of possible loss from the probability of gain times the amount of possible gain. That is what we're trying to do. It's imperfect, but that's what it's all about.

Warren Buffett

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Warren Buffett
Age: 94
Born: 1930
Born: August 30
Entrepreneur
Financier
Investor
Shareholder
Omaha
Nebraska
Warren Edward Buffett
Trying
Imperfect
Gain
Gains
Loss
Amount
Possible
Times
Take
Probability

More quotes by Warren Buffett

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I made my first investment at age eleven. I was wasting my life up until then.
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When you build a bridge, you insist that it can carry 30,000 pounds, but you only drive 10,000-pound trucks across it. And that same principle works in investing.
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The most common cause of low prices is pessimism - some times pervasive, some times specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It's optimism that is the enemy of the rational buyer.
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If you don't make mistakes you can't make decisions.
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Buy stocks like you buy your groceries, not like you buy your perfume.
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We also believe candour benefits us as managers. The CEO who misleads often in public eventually misleads himself in private.
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Our policy is to concentrate holdings. We try to avoid buying a little of this or that when we are only lukewarm about the business or its price. When we are convinced as to attractiveness, we believe in buying worthwhile amounts.
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Money will always flow toward opportunity, and there is an abundance of that in America.
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Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results.
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I have never been able to understand why the tax comes as such a body blow to many people since the rate on long-term capital gain is lower than on most likes of endeavor (tax policy indicated digging ditches is regarded as socially less desirable than shuffling stock certificates).
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Making money isn't the backbone of our guiding purpose making money is the by-product of our guiding purpose. If you're doing something you love, you're more likely to put your all into it, and that generally equates to making money
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The managers at fault periodically report on the lesson they have learned from the latest disappointment. They then usually seek out future lessons.
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When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact.
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We like to buy businesses, but we don't like to sell them.
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Accounting consequences do not influence our operating or capital-allocation decisions. When acquisition costs are similar, we much prefer to purchase $2 of earnings that is not reportable by us under standard accounting principles than to purchase $1 of earnings that is reportable.
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I know what I want to do and it makes sense to get going.
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Never ask a barber if you need a haircut.
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Businesses always have opportunities to improve service, product lines, manufacturing techniques, and the like, and obviously these opportunities should be seized. But a business that constantly encounters major change also encounters many chances for major error
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We will prosper or suffer in controlled investments in relation to the operating performances of our businesses - we will not attempt to profit by playing various games in the securities markets.
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The dumbest reason in the world to buy a stock is because it's going up.
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