What an investor needs is the ability to correctly evaluate selected businesses. Note that word 'selected': You don't have to be an expert on every company, or even many. You only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important; knowing its boundaries, however, is vital.

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If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes.

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If you expect to be a net saver during the next five years, should you hope for a higher or lower stock market?...Many investors get this one wrong...Only those who will be sellers of equities in the near future should be happy at seeing stocks rise.

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In assessing risk, a beta purist will disdain examining what a company produces, what its competitors are doing... What he treasures is the price history of its stock. In contrast, we... seek whatever information will further our understanding of the company's business. After we buy a stock we would not be disturbed if markets closed for a year or two.

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Smile when you read a headline that says 'Investors lose as market falls.' Edit it in your mind to 'Disinvestors lose as market falls�but investors gain.' Though writers often forget this truism, there is a buyer for every seller and what hurts one necessarily helps the other.

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The true investor 'welcomes' volatility...a wildly fluctuating market means that irrationally low prices will periodically be attached to solid businesses.

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Why potential buyers even look at projections prepared by sellers baffles me... I never give them a glance, but instead keep in mind the story of the man with an ailing horse. Visiting the vet, he said: 'Can you help me? Sometimes my horse walks just fine and sometimes he limps.' The vet's reply was pointed: 'No problem � when he's walking fine, sell him.'

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Your goal as an investor...to purchase, at a rational price, a part interest in an easily-understandable business whose earnings are virtually certain to be materially higher... years from now. Over time, you will find only a few companies that meet these standards�so when you see one... buy a meaningful amount of stock.

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The truly big investment idea can usually be explained in a short paragraph. We like a business with enduring competitive advantages that is run by able and owner-oriented people. When these attributes exist, and when we can make purchases at sensible prices, it is hard to go wrong.

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Derivatives are financial weapons of mass destruction.

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