Warren Buffett Quotes

The only thing you should do with pro forma earnings is ignore them.

I've already written a section in the annual report for next year explaining why I think in one case that the figures on our balance sheet as calculated are wrong. But it's the standard way of doing it. It's holy writ. The SEC wants us to do it that way, and we'll do it that way, and I'll explain why I think it's wrong and shareholders can read it and see whether they agree with my logic or don't.

If you look at the history of the American capital market, there's probably no innovation more important than the idea of generally accepted accountancy principles.

We must move rapidly toward achieving worldwide accounting standards that are at least as rigorous as the Generally Accepted Accounting Principles in the United States. It is hardly possible to have a meaningful evaluation of institutional risk unless a reliable and readily understandable picture of the basic economics of the institution can be obtained.

The concept of fair value accounting is correct and useful, but the application during periods of crisis is problematic. It's another one of those unintended consequences of making a rule that's supposed to be good that turns out the other way.

I'm saying that when a publicly traded company says something doesn't make a difference in terms of their investments, I trust that they are representing those facts accurately.

I think corporate managers should learn to be better investors because it would make them better managers.

Our economy is the result of millions of decisions we all make every day about producing, earning, saving, investing, and spending.

I don't mean to sugarcoat the figure on restatements, but I think it is positive - it shows a healthy system. The general impression of the public is that accounting rules are black and white. They are often anything but that, and in many instances the changes in earnings came after new interpretations by the chief accountant of the SEC.

A lot of people disagree with me on this, I believe in mark to market.

Accounting is the language of business.

Basically, financial reporting is this sinking hole at the centre of journalism. You start by swimming around it until finally, reluctantly, you can't fight the pull anymore and you get sucked down the drain into the biz pages.

Aggressive accounting does not mean illegal accounting.

In every mutual fund prospectus, in every sales promotional folder, and in every mutual fund advertisement (albeit in print almost too small to read), the following warning appears: "Past performance is no guarantee of future results."

If horses had controlled investment decisions, there would have been no auto industry.

It is obvious that the performance of a stock last year or last month is no reason, per se, to either own it or to not own it now. It is obvious that an inability to "get even" in a security that has declined is of no importance. It is obvious that the inner warm glow that results from having held a winner last year is of no importance in making a decision as to whether it belongs in an optimum portfolio this year.

I very often used to get backaches due to the fact that I was wrong. Whenever you are wrong you have to fight or [take] flight. When [I] make the decision, the backache goes away.

You have to know accounting. It's the language of practical business life. It was a very useful thing to deliver to civilization. I've heard it came to civilization through Venice which of course was once the great commercial power in the Mediterranean. However, double entry bookkeeping was a hell of an invention.

Never buy a stock because it has gone up or sell one because it has gone down.

There is no question that an important service is provided to investors by investment companies, investment advisors, trust departments, etc. This service revolves around the attainment of adequate diversification, the preservation of a long-term outlook, the ease of handling investment decisions and mechanics, and most importantly, the avoidance of the patently inferior investment techniques which seem to entice some individuals.

Hint: money flows into most funds after good performance, and goes out when bad performance follows.

We make investment decisions based on our evaluation of the most profitable combination of probabilities.

I won't close down a business of subnormal profitability merely to add a fraction of a point to our corporate returns. I also feel it inappropriate for even an exceptionally profitable company to fund an operation once it appears to have unending losses in prospect. Adam Smith would disagree with my first proposition and Karl Marx would disagree with my second; the middle ground is the only position that leaves me comfortable.

Earnings can be pliable as putty when a charlatan heads the company reporting them.

Those with the enterprise lack the money and those with the money lack the enterprise to buy stocks when they are cheap.