When Berkshire Hathaway CEO Warren Buffett makes investing decisions, he focuses on one thing only: the facts.
"You have to be able to play out your hand under all circumstances," Buffett told shareholders in 2006. "But if you can play out your hand, and you've got the right facts, and you reason by yourself, and you let the market serve you and not instruct you, you can't miss."
Your opinions and emotions aren't likely to help you. "Being contrarian has no special virtue over being a trend follower," Buffett says. Instead, the Oracle of Omaha suggests taking a pragmatic approach to investing decisions. First, gather all of your facts. Next, learn how to dissect them to find the pertinent information you need to make your decision. For Buffett, that means looking for the pieces that are "important and knowable."
"If something's important but unknowable, forget it," he says. "I mean, it may be important whether somebody's going to drop a nuclear weapon tomorrow, but it's unknowable."
These quotes reveal Warren Buffett's legendary business mind :-
"Someone’s sitting in the shade today because someone planted a tree a long time ago."
"The stock market is designed to transfer money from the active to the patient."
"Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a fly epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497."
"The most common cause of low prices is pessimism—some times pervasive, some times specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It’s optimism that is the enemy of the rational buyer."
"Do not save what is left after spending; instead spend what is left after saving."
"If you buy things you do not need, soon you will have to sell things you need."