Best Warren Buffett Quotes from His Annual Letter to Shareholders

The Sound Stewardship advisors headed up to Nebraska last weekend to hear the “Oracle of Omaha” at Berkshire Hathaway’s annual meeting.

On having an emergency cash reserve: Warren Buffett is as renowned for his down-to-earth advice as he is for his investing success. In light of our trip, I thought I’d share some of my favorite quotes from his annual letter to shareholders. His thinking aligns very well with our Sound Stewardship Principles.

“When bills come due, only cash is legal tender. Don’t leave home without it.”

“At a healthy business, cash is sometimes thought of as something to be minimized – as an unproductive asset that acts as a drag on such markers as return on equity. Cash, though, is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent.”

On preparing, not predicting:

“Though practically all days are uneventful, tomorrow is always uncertain. (I felt no special apprehension on December 6, 1941 or September 10, 2001.) And if you can’t predict what tomorrow will bring, you must be prepared for whatever it does.”

“Anything can happen anytime in markets. And no advisor, economist, or TV commentator – and definitely not Charlie nor I – can tell you when chaos will occur. Market forecasters will fill your ear but will never fill your wallet.”

On being diversified:

“I believe the chance of any event causing Berkshire to experience financial problems is essentially zero. We will always be prepared for the thousand-year flood; in fact, if it occurs we will be selling life jackets to the unprepared.”

On knowing your limits:

“Investors, of course, can, by their own behavior, make stock ownership highly risky. And many do. Active trading, attempts to ‘time’ market movements, inadequate diversification, the payment of high and unnecessary fees to managers and advisors, and the use of borrowed money can destroy the decent returns that a life-long owner of equities would otherwise enjoy.”

On thinking beyond yourself:

“Character is crucial: A Berkshire CEO must be ‘all in’ for the company, not for himself… it’s important that neither ego nor avarice motivate him to reach for pay matching his most lavishly-compensated peers, even if his achievements far exceed theirs.”

Buffett attributes his exceptional success to sticking with his principles and plan over the long-haul. If you need help building and sticking with your own financial plan, that’s what we’re here for! Give us a call at 913-317-6000.

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