A Man for All Markets

It doesn’t pay to push the other party to their absolute limit. A small extra gain is generally not worth the substantial risk the deal will break up.

It’s like the case of the man who was cited three times in a single year for driving while intoxicated. His neighbor would also drink and drive, but was never pulled over. Who is the greater criminal? Now suppose I tell you that the caught man did it only three times and was apprehended every time, whereas his neighbor did it a hundred times and wa

One problem in large bureaucracies is that many of the members decide it is better not to cross people, instead of standing on principle.

Warren didn’t mind substantial variations in market prices over months or even a few years because he believed that in the long run the market would be up strongly and by regularly beating it during its fluctuations his wealth would grow over time much faster than the overall market.

“Be fearful when others are greedy and greedy when others are fearful.” His objective was to outperform the market in the long run and so he judged himself largely on his performance relative to the market.

To form a hedge, take two securities whose prices tend to move together, such as a warrant and the common stock it can be used to purchase, but which are comparatively mispriced. Buy the relatively underpriced security and sell short the relatively overpriced security. If the proportions in the position are chosen well, then even though prices fluc

also learned from my losing silver investment that when the interests of the salesmen and promoters differ from those of the client, the client had better look out for himself.

Since I really had no predictive power, any exit strategy was as good or bad as any other.

Lesson: Do not assume that what investors call momentum, a long streak of either rising or falling prices, will continue unless you can make a sound case that it will.