- “Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.”
- “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
- “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
- “Investors making purchases in an overheated market need to recognize that it may often take an extended period for the value of even an outstanding company to catch up with the price they paid.”
- “If a business does well, the stock eventually follows.”
- “Price is what you pay. Value is what you get.”
- “Time is the friend of the wonderful company, the enemy of the mediocre.”
Clearly, Warren Buffet is a value investor. He looks for great companies, or “wonderful” ones as he puts it. He is not looking at hot sectors or stocks that may shoot up now, only to cool and fall later. He wants an efficient running business that has favorable long-term prospects.
Additionally, although he wants great stocks, he does not want to pay a premium price. Warren uses a specific calculation to arrive at a fair valuation, then waits until a market correction or crash puts those prices on his doorstep.