As an investor with small capital, one should prefer businesses that have high returns on capital and that require little incremental investment to grow.
When you build a bridge, you insist that it can carry 30,000 pounds, but you only drive 10,000-pound trucks across it. And that same principle works in investing.
Cash, though, is to a business as oxygen is to an individual: never thought about when it is present, the only thing in mind when it is absent... When bills come due, only cash is legal tender. Don't leave home without it.
If you've got a good enough business, if you have a monopoly newspaper, if you have a network television station - I'm talking of the past - you know, your idiot nephew could run it. And if you've got a really good business, it doesn't make any difference.
Only those who will be sellers of equities in the near future should be happy at seeing stocks rise. Prospective purchasers should much prefer sinking prices.
AIG would be doing fine today. It was one of the ten largest companies in the United States in terms of market value, over 200 billion, the most respected insurer and everything in the world.
Anyone who believes a growth rate in excess of 15% per annum over the long term is attainable should pursue a career in sales, but avoid one in mathematics.
The most important investment you can make is in yourself. Very few people get anything like their potential horsepower translated into the actual horsepower of their output in life. Potential exceeds realization for many people...The best asset is your own self. You can become to an enormous degree the person you want to be.
I have never been able to understand why the tax comes as such a body blow to many people since the rate on long-term capital gain is lower than on most likes of endeavor (tax policy indicated digging ditches is regarded as socially less desirable than shuffling stock certificates).
Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful.
For some reason, people take their cues from price action rather than from values. What doesn't work is when you start doing things that you don't understand or because they worked last week for somebody else. The dumbest reason in the world to buy a stock is because it's going up.