Learn from your mistakes. On his investment in an investment bank, Salomon Brothers: Buffett said, “I felt like the drama critic who wrote: I would have enjoyed the play except that I had an unfortunate seat. It faced the stage.”

— Be suspicious of the motives of people on Wall Street: Wall Street is the only place that people ride to work in a Rolls-Royce to get advice from those who take the subway.


— Don’t be blinded by the past performance of a company. The investor of today does not profit from yesterday’s growth.

— Don’t buy into industries whose future performance is difficult to forecast: I look for businesses in which I think I can predict what they’re going to look like in ten to fifteen years’ time. Take Wrigley’s chewing gum. I don’t think the Internet is going to change how people chew gum.

— Shun any business that is complex and hard to understand: I want to be able to explain my mistakes. This means I do only the things I completely understand.

— Be suspicious of any deal that is widely applauded at the time: You pay a very high price in the stock market for a cheery consensus.

Source: TimesOnLine

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