Happy 80th Birthday to Warren Buffett

2010-8-warrenbuffettWarren Buffett turns 80 today so it seems fitting to share some of his real estate investing knowledge. What an amazing man he is- doesn’t look like he is slowing down yet!


    1. “Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.”Translation: Today’s market fluctuations are your friend because they’ve scared off your competition…other investors. They’re also your friend because the fluctuations have caused there to be a flood of motivated sellers. And as any savvy investor knows, buying from motivated sellers is the only way to make it in this business.
    2. “Only when the tide goes out do you discover who’s been swimming naked.”Translation: Keep plenty of tools (investing techniques) in your tool belt so that you can adapt to a changing market. What worked best in 2005 doesn’t work best in 2008. Today, we’re seeing first hand that those with only one investing strategy are taking a beating.
    3. “Our favorite holding period is forever.”Translation: To build true long-term wealth, you must buy and hold properties.
    4. “Risk comes from not knowing what you’re doing.”Translation: Those who don’t know how to properly analyze, enter, and exit real estate transactions think today’s market is risky. Those who fully understand the intricacies of creative real estate investing continue to participate and profit.
    5. “I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.”Translation: Now’s the time to buy. In real estate and in life, it’s almost always best to act opposite to the crowd.
    6. “Wide diversification is only required when investors do not understand what they are doing.”Translation: Naive real estate investors are putting their money into stocks, bonds, and savings accounts right now. Smart investors continue to invest in real estate, and they’re picking up more bargains than ever.
    7. “Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results.”Translation: If you’re concerned that you cannot sell for full value, then buy lower – at about 60% of value – and sell lower – at about 90% of value.
    8. “We will reject interesting opportunities rather than over-leverage our balance sheet.”Translation: Sometimes the best real estate deals are the ones you don’t make.
    9. “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”Translation: If you’re going to hold a property long term, it’s far better to buy a wonderful house at a fair price than a dump at a bargain.
    10. “A public-opinion poll is no substitute for thought.”Translation: Most Americans think that now is a risky time to get into real estate investing. Do they know more than you? Most likely not. Only a handful of Americans know the specific techniques for profiting in today’s market. Most Americans get their “investing tips” from the daily paper, not the best real estate source.
    11. “The most important quality for an investor is temperament, not intellect… You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.”Translation: Don’t worry what the masses are doing. Follow the advice of successful real estate investors, and use their techniques to profit in today’s market.
    12. “You ought to be able to explain why you’re taking the job you’re taking, why you’re making the investment you’re making, or whatever it may be. And if it can’t stand applying pencil to paper, you’d better think it through some more. And if you can’t write an intelligent answer to those questions, don’t do it.”Translation: Every deal must work on paper before it will ever work in real life.
    13. “I really like my life. I’ve arranged my life so that I can do what I want.”Translation: Remember, that’s what real estate investing is all about. Arranging your life so that you can do what you want to do when you want to do it.

Thanks to Doug Smith for this great list of quotes and translations.

Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>