Friday, December 30, 2011

Quotes of 2011

A collection of quotes said or written at some point during this calendar year.

Amazon's Jeff Bezos on Inventing & Disrupting
"Just by lengthening the time horizon, you can engage in endeavors that you could never otherwise pursue. At Amazon we like things to work in five to seven years. We're willing to plant seeds, let them grow—and we're very stubborn. We say we're stubborn on vision and flexible on details." - Jeff Bezos

The Bond Market Rules
"Unrecognized as saviors, the bond vigilantes are demanding the keys to the Eternal City. If the Italian people are very lucky and very wise, they will allow themselves to be ruled by the bond market." - Thomas Donlan

PIMCO's Bill Gross
"Wall Street sort of lost its way, in that investment banking became a function not of allocating capital properly, but levering capital and levering the returns on capital as opposed to transferring capital to productive industries." - Bill Gross

Bogle Back to the Basics - Speculation Dwarfing Investment
"...our financial system has directed around $200 billion a year into initial public offerings and additional new public offerings and then additional offerings of company stock--$200 billion. We trade $40 trillion worth of stocks a year. So, that's 200 times as much speculation as there is investment. One only has to understand that all this trading back and forth, by definition, doesn't enrich the investor, because if I buy, you sell and vice versa, but what it does is enrich the croupier in the middle, which we call Wall Street..." - John Bogle

Final Wesco Meeting: More From Charlie Munger
"I like people admitting they were complete stupid horses' asses. I know I'll perform better if I rub my nose in my mistakes. This is a wonderful trick to learn." - Charlie Munger

Warren Buffett on the 'New Normal' & 'Black Swans'
"I think the luckiest person around is the baby that's born in the United States today. I don't think there's any question about it. I mean...that person is going, on average, to enjoy a far better life, you know, than John D. Rockefeller had many years ago or that I have now....and so I think if there's a new normal, it will be a higher normal in terms of the average person of how they lived 20 years from now and 50 years from now." - Warren Buffett

"...we will have black swans, but we'll overcome black swans." - Warren Buffett

Final Wesco Meeting: A Morning With Charlie Munger
"Clever derivatives broke dozens of companies. It killed them. Bankrupt. We don't need these kinds of innovation in finance. It's OK to be boring in finance. What we want is innovation in widgets." - Charlie Munger

"When we bought See's Candies, we didn't know the power of a good brand. Over time we just discovered that we could raise prices 10% a year and no one cared. Learning that changed Berkshire. It was really important." - Charlie Munger

Munger on the Financial Sector
"Why should an investment banker go to Greece to teach them how to pretend their finances are different from what they really are? Why isn't that a perfectly disgusting bit of human behavior?" - Charlie Munger

Klarman: Trophy Properties vs Fixer-Uppers
"Price is perhaps the single most important criterion in sound investment decision making. Every security or asset is a 'buy' at one price, a 'hold' at a higher price, and a 'sell' at some still higher price. Yet most investors in all asset classes love simplicity, rosy outlooks and the prospect of smooth sailing. They prefer what is performing well to what has recently lagged, often regardless of price. They prefer full buildings and trophy properties to fixer-uppers that need to be filled, even though empty or unloved buildings may be the far more compelling, and even safer, investments." - Seth Klarman

Barron's Interview: Donald Yacktman
"I have to go back a minimum of 18 years to find blue-chip or high-quality companies selling at these kinds of prices relative to other things out there. It is a very unique period." - Donald Yacktman

2010 Berkshire Shareholder Letter: $ 66 Billion in Cost-Free Deposits
"At Berkshire, we have now operated at an underwriting profit for eight consecutive years, our total underwriting gain for the period having been $17 billion. I believe it likely that we will continue to underwrite profitably in most – though certainly not all – future years. If we accomplish that, our float will be better than cost-free. We will benefit just as we would if some party deposited $66 billion with us, paid us a fee for holding its money and then let us invest its funds for our own benefit." - Warren Buffett

Buffett: Six-fold Increase in Living Standards
"Money will always flow toward opportunity, and there is an abundance of that in America. Commentators today often talk of "great uncertainty." But think back, for example, to December 6, 1941, October 18, 1987 and September 10, 2001. No matter how serene today may be, tomorrow is always uncertain.

Don't let that reality spook you. Throughout my lifetime, politicians and pundits have constantly moaned about terrifying problems facing America. Yet our citizens now live an astonishing six times better than when I was born. The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential – a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War – remains alive and effective. 

We are not natively smarter than we were when our country was founded nor do we work harder. But look around you and see a world beyond the dreams of any colonial citizen. Now, as in 1776, 1861, 1932 and 1941, America's best days lie ahead." - Warren Buffett

Happy New Year,

Adam

Long position in Berkshire Hathaway (BRKb). No position in Amazon (AMZN).

Quotes of 2010

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