Concentrate your energy, thought and capital exclusively upon the business in which you are engaged... 'Don't put all your eggs in one basket' is all wrong. I tell you 'put all your eggs in one basket, and then watch that basket.'
Obviously, consideration of costs is key, including opportunity costs. Of course capital isn't free. It's easy to figure out your cost of borrowing, but theorists went bonkers on the cost of equity capital. They say that if you're generating a 100% return on capital, then you shouldn't invest in something that generates an 80% return on capital. It's crazy.
Prices impose the most effective kind of rationing - self-rationing. Why is rationing necessary? Because what everybody wants always adds up to more than there is. . .Resources are limited but desires are not. That is the basic and defining problem of economics.
As an economist, whenever I hear the word shortage I wait for the other shoe to drop. That other shoe is usually price control.
Berkshire's past record has been almost ridiculous. If Berkshirehad used even half the leverage of, say, Rupert Murdoch, it would be five times its current size.
The world is constantly in a race to the top, in terms of there's a limited amount of capital and you've got to figure where it's going. And if your currency is weakening, that means you're paying a load.
We're guessing at our future opportunity cost. Warrenis guessing that he'll have the opportunity to put capital out at high rates of return, so he's not willing to put it out at less than 10% now. But if we knew interest rates would stay at 1%, we'd change. Our hurdles reflect our estimate of future opportunity costs.
In Canada, there's a surprising worship of managerialism versus ownership and wealth creation. There's a real problem in this country with believing that management is the answer to our problems.
To focus capital and entrepreneurship into empowering innovation, we should change is the capital gains tax rate. We would be better served by a regressive tax rate, that would become progressively smaller the longer the investment is held.
Low interest rates are a big opportunity for investment. But the issue is that this money should go to the real economy, not the financial economy.
Look, don't congratulate us when we buy a company, congratulate us when we sell it. Because any fool can overpay and buy a company, as long as money will last to buy it.
The advantage of a free market is that it allows millions of decision-makers to respond individually to freely determined prices, allocating resources - labor, capital and human ingenuity - in a manner that can't be mimicked by a central plan, however brilliant the central planner.
Panics do not destroy capital; they merely reveal the extent to which it has been previously destroyed by its betrayal into hopelessly unproductive works.
It doesn't take Warren Buffett to realize that when companies don't know what new rules will look like, it affects their ability to commit capital and create new jobs.
I'm always investing. I'm constantly in talks with someone about some opportunity.
I'm not worried they're all about the investments we make. I mean, listen, this country - we've got $46,000 or $47,000 of GDP per capita. Now, we've done pretty darn well. We'll do better in the future.
I'd stay away from investments in a variety of sectors that are capital intensive. Anyone who says we need $100 million before we know if what we're doing makes sense and the customers want it - that's not going to work.
Well British pension funds have not been investing the savings of British people in British infrastructure.
To finance deficits, the government must sell bonds to investors, competing for capital that could otherwise be used to invest in stocks or corporate bonds. Government borrowings raise long-term interest rates, stifling economic growth.
That is, many times we're not risking our own money, we're risking somebody else's money, or maybe that someone is going to back stop or downside, but we still get the upside.
It is not by augmenting the capital of the country, but by rendering a greater part of that capital active and productive than would otherwise be so, that the most judicious operations of banking can increase the industry of the country.
You must take risks, both with your own money or with borrowed money. Risk taking is essential to business growth.
Washington, D.C., has a much greater risk than Manchester, N.H. They both need some level of funding, but they ought not to be done per capita. Congress is to blame for some of this.
Again two manufacturers may employ the same amount of fixed, and the same amount of circulating capital; but the durability of their fixed capitals may be very unequal.
It's just that I landed up in a terrific capitalist system. One that pays people who allocate capital extraordinarily well. Intrinsically, I'm not worth as much as somebody who invents something that could improves people's life, or health or whatever.
