Although Warren plays the tycoon game of buying companies at the topmost level, much of his advice is still relevant for smaller players.

“Price is what you pay. Value is what you get.”

“Your goal as an investor should be simply to purchase, at a rational price, a part interest in an easily understood business whose earnings are virtually certain to be materially higher, five, ten and twenty years from now. Over time, you will find only a few companies that meet those standards— so when you see one that qualifies, you should buy a meaningful amount of stock.” In Warren’s case, he typically buys the entire company.

Warren Buffett on how to buy a business.

“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

“Look for the durability of the franchise. The most important thing to me is figuring out how big a moat there is around the business. What I love, of course, is a big castle and a big moat with piranhas and crocodiles.”

“When managers want to get across the facts of the business to you, it can be done within the rules of accounting. Unfortunately, when they want to play games, at least in some industries, it can also be done within the rules of accounting.”

“You should have a knowledge of how business operates and the language of business [accounting}, some enthusiasm for your subject, and qualities of temperament, which may be more important than IQ points.”

On the importance of ongoing frugality: “Whenever I read about some company undertaking a cost-cutting program, I know it’s not a company that really knows what costs are all about. Spurts don’t work in this area. The really good manager does not wake up in the morning and say, ‘This is the day I’m going to cut costs,’ any more than he wakes up and decides to practice breathing.”

Deal only with those who believe in their products and services. “I don’t want to be on the other side of the table from the customer. I was never selling anything that I didn’t believe in myself or use myself.”

“If past history was all there was to the game, the richest people would be librarians.”

Warren pointing to a Peter Drucker quote that he likes: “‘I will tell you a secret: Deal making beats working. Deal making is exciting and fun, and working is grubby. Running anything is primarily an enormous amount of grubby detail work … deal making is … romantic, sexy. That’s why you have deals that make no sense.’”

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