Warren Buffett is famous for his wit, and will likely go down in history as one of the most quotable and influential investors of all time.
With this week marking his 89th birthday, we thought it was a good time to highlight the 25 best Warren Buffett quotes accumulated through his lengthy and prestigious career.
The Warren Buffett Series
Part 5: Wisdom from the Oracle
Today’s infographic highlights the smartest and most insightful quotes from Buffett on investing, business, and life.
It’s the fifth and final part of the Warren Buffett Series, which we’ve done in partnership with finder.com, a personal finance site that helps people make better decisions – whether they want to find the right credit card or become the next big value investor.
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After sifting through hundreds of quotes from the Oracle of Omaha, we’ve chosen the best 25 of them and sorted them into a few select categories:
Keeping it Simple
Buffett is known for putting his money in “no-brainer” businesses (i.e. Coca-Cola) that are simple to run, with long-term competitive advantages.
|Buffett Quotes on Keeping It Simple|
|#1||“Never invest in a business you cannot understand.”|
|#2||“I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.”|
|#3||“I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.”|
|#4||“A ham sandwich could run Coca-Cola."|
|#5||“Beware of geeks bearing formulas.”|
|#6||"You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ."|
|#7||“Rule No. 1: Never lose money. Rule No. 2: Never forget rule No.1”|
For Buffett, how someone responds to different situations is far more important than their actual skills or knowledge level. Investors must not care what the crowd thinks, and they must be patient, focused, and decisive to maximize their potential.
|Buffett Quotes on Temperament|
|#8||"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."|
|#9||“It’s only when the tide goes out that you learn who has been swimming naked.”|
|#10||“Our favorite holding period is forever.”|
|#11||“Someone’s sitting in the shade today because someone planted a tree a long time ago.”|
|#12||“An investor should act as though he had a lifetime decision card with just twenty punches on it.”|
Buffett’s decision-making is driven by an assessment of value. Is the asset he is buying worth way more than it is currently being priced at by the fickle Mr. Market – if so, he’ll lay down his chips.
|Buffett Quotes on Value|
|#13||"Price is what you pay; value is what you get."|
|#14||"Be fearful when others are greedy and greedy when others are fearful."|
|#15||“It’s far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.”|
A Midwestern gentleman, Buffett follows a simple and friendly style of business conduct, with deals often bounded by one’s promise or a simple handshake.
|Buffett Quotes on Conduct|
|#16||"You can't make a good deal with a bad person."|
|#17||"It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently."|
At 89 years old, Buffett knows a thing or two about business and life. As a result, he’s developed some unique perspectives.
|Buffett Quotes on Perspective|
|#18||“In the business world, the rearview mirror is always clearer than the windshield.”|
|#19||“If past history was all that is needed to play the game of money, the richest people would be librarians.”|
|#20||“Failing conventionally is the route to go; as a group, lemmings may have a rotten image, but no individual lemming has ever received bad press”|
|#21||"In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal."|
Life and Success
How did he build such a successful career, and how does one man generate so much wisdom?
|Buffett Quotes on Life and Success|
|#22||“The most important investment you can make is in yourself.”|
|#23||“If you get to my age in life and nobody thinks well of you, I don’t care how big your bank account is, your life is a disaster.”|
|#24||"I do more reading and thinking, and make less impulse decisions than most people in business. I do it because I like this kind of life."|
|#25||"My life couldn't be happier. In fact, it'd be worse if I had six or eight houses. So, I have everything I need to have, and I don't need any more."|
With $89.5 billion to his name, Warren Buffett is not only known for his self-made wealth and investing acumen, but also his wit and quotability. We hope this selection of the best Warren Buffett quotes helps you think about life and investing differently, and that the legendary investor continues to share his wisdom with the world.
Want more Buffett?
Don’t forget to check out the other parts of our Buffett infographic series:
- Part 1: The Remarkable Early Years of Warren Buffett
- Part 2: Inside Warren Buffett’s Brain
- Part 3: The Warren Buffett Empire in One Giant Chart
- Part 4: Warren Buffett’s Wins & Fails
Cocoa: A Bittersweet Supply Chain
The cocoa supply chain is a bittersweet one. While chocolate is a beloved sweet treat globally, many cocoa farmers are living a bitter reality.
Cocoa: A Bittersweet Supply Chain
From bean to bar, the cocoa supply chain is a bittersweet one. While the end product is something most of us enjoy, this also comes with a human cost.
Based on how much cocoa comes from West Africa, it’s likely that most of the chocolates we eat have a little bit of Cote d’Ivoire and Ghana in them. The $130B chocolate industry relies on cocoa farming for supply of chocolate’s key ingredient. Yet, many cocoa farmers make less than $1/day.
The above graphic maps the major trade flows of cocoa and allows us to dive deeper into its global supply chain.
From Bean to Bar: Stages in the Cocoa Supply Chain
Cocoa beans go through a number of stages before being used in chocolate products.
- Harvesting, Fermenting, and Drying
First, farmers harvest cocoa beans from pods on cacao plants. Next, they are fermented in heaps and covered with banana leaves. Farmers then dry and package the cocoa beans for domestic transportation.
- Domestic Transportation, Cleaning, and Exporting
Domestic transporters carry packaged cocoa beans to either cleaning warehouses or processing factories. Cocoa beans are cleaned and prepared for exports to the chocolate production hubs of the world.
- Processing and Chocolate Production
Processing companies winnow, roast, and grind cocoa beans and then convert them into cocoa liquor, cocoa butter, or cocoa cakes—which are mixed with other ingredients like sugar and milk to produce chocolate products.
Cocoa farming and trade are at the roots of the chocolate industry, and the consistent supply of cocoa plays a critical role in providing us with reasonably-priced chocolate.
So where exactly does all this cocoa come from?
The Key Nations in Cocoa’s Global Supply Chain
Growing cocoa has specific temperature, water, and humidity requirements. As a result, the equatorial regions of Africa, Central and South America, and Asia are optimal for cocoa farming.
These regions host the biggest cocoa exporters by value.
|Rank (2019)||Exporting Country||Value (US$, millions)|
|1||Côte d’Ivoire 🇨🇮||$3,575|
Côte d’Ivoire and Ghana are responsible for 70% of global cocoa production, and cocoa exports play a huge role in their economies. Although the majority of exporters come from equatorial regions, Belgium stands out in fifth place.
On the other hand, most of the top importers are in Europe—the Netherlands and Germany being the top two.
|Rank (2019)||Importing Country||Value (US$, millions)|
In third place, the U.S. primarily sources its cocoa from Côte d’Ivoire, Ghana, and Ecuador. Mars, Hershey, Cargill, and Blommer—some of the world’s biggest chocolate manufacturers and processors—are headquartered in the U.S.
Finally, it comes as no surprise that the biggest importers of cocoa beans are among the biggest chocolate exporters.
|Rank (2019)||Country||Value of Chocolate Exports
Not only is the Netherlands the biggest importer of beans, but it’s also the biggest processor—grinding 600,000 tons annually—and the fourth largest exporter of chocolate products.
Belgium is another key nation in the supply chain, importing cocoa beans from producing countries and exporting them across Europe. It’s also home to the world’s largest chocolate factory, supporting its annual chocolate exports worth $3.1 billion.
Breaking Down the Cocoa Supply Chain: Who Gets What
Without farmers, both the cocoa and chocolate industries are likely to suffer from shortages, with domino effects on higher overall costs. Yet, they have little ability to influence prices at present.
Farmers are among the lowest earners from a tonne of sold cocoa—accounting for just 6.6% of the value of the final sale.
Low incomes also translate into numerous other issues associated with cocoa farming.
The Bitter Side of Cocoa Farming
The World Bank has established the threshold for extreme poverty at $1.90/day. Cocoa farmers in Ghana make $1/day, while those in Côte d’Ivoire make around $0.78/day—both significantly below the extreme poverty line.
Farmers are often unable to bear the costs of cocoa farming as a result of low incomes. In turn, they employ children, who miss out on education, are exposed to hazardous working conditions, and get paid little or no wages.
|Country||Cocoa Farmers Making $1/day or less||Children in Cocoa Agriculture|
|Côte d’Ivoire 🇨🇮||600,000||891,500|
To make matters worse, cocoa farming is primarily responsible for deforestation and illegal farming in Côte d’Ivoire and Ghana—adding environmental issues to the mix.
These interconnected problems call for action, so what is being done to fight them?
Combating Cocoa’s Concerns
Mars, Nestlé, and Hershey—some of the world’s biggest chocolate manufacturers—have made several pledges to eradicate child labor in cocoa farming over the last two decades, but haven’t reached their targets.
In addition, organizations such as UTZ Certified, Rainforest Alliance, and Fairtrade are working to increase traceability in the supply chain by selling ‘certified cocoa’, sourced from farms that prohibit child labor.
More recently, Côte d’Ivoire and Ghana announced a fixed premium of US$400/tonne on cocoa futures, aiming to improve farmer livelihoods by creating a union for cocoa, also known colloquially as the “COPEC” for the industry.
While these initiatives have had some positive impacts, more still needs to be done to successfully eradicate large-scale child labor and poverty of those involved in cocoa’s bittersweet supply chain.
Volatile Returns: Commodity Investing Through Miners and Explorers
The companies that mine or explore for metals offer additional leverage to commodity prices, creating opportunities for astute investors.
Volatile Returns: Commodity Investing Through Miners
Investors consider gold and silver as safe haven investments. But the companies that produce gold and silver often offer volatile returns, creating opportunities for astute investors.
Volatility is a double-edged sword, particularly when it comes to commodity investing. During the good times, it can create skyrocketing returns. But during bad times, it can turn ugly.
Today’s infographic comes to us from Prospector Portal, and shows how investing in precious metals equities can outperform or underperform the broader metals market.
Capitalizing on Volatility: Timing Matters
Just like most investments, timing matters with commodities.
Due to the complex production processes of commodities, unexpected demand shocks are met with slower supply responses. This, along with other factors, creates commodity supercycles—extended periods of upswings and downswings in prices.
Investors must time their investments to take advantage of this volatility, and there are multiple ways to do so.
Three Ways to Invest in Commodities
There are three primary routes investors can take when it comes to investing in commodities.
|Direct physical investment||
Among these, commodity-related equities offer by far the most leverage to changes in prices. Let’s dive into how investors can use this leverage to their advantage with volatile metal prices.
The Fundamentals of Investing in Mining Equities
When it comes to commodity investing, targeting miners and mineral exploration companies presents fundamental benefits and drawbacks.
As metal prices rise, the performance of mining companies improves in several ways—while in deteriorating conditions, they do the opposite:
|Category||Rising Commodity Prices||Falling Commodity Prices|
|Outlook||- Improved outlook||- Deteriorated outlook|
|Stock Price Movement||- Equity growth||- Equity decline|
|Dividend Payouts||- Increased dividends||- Decreased dividends|
|Financial Performance||- Increased earnings||- Decreased earnings|
With the right timing, these ups and downs can create explosive opportunities.
Mining companies, especially explorers, use these price swings to their advantage and often produce market-beating returns during an upswing.
The Proof: How Mining Equities React to Metal Prices
Not only do price increases translate into higher profits for mining companies, but they can also change the outlook and value of exploration companies. As a result, investing in exploration companies can be a great way to gain exposure to changing prices.
That said, these types of companies can generate greater equity returns over a shorter period of time when prices are high, but they can also turn dramatically negative when prices are low.
Below, we compare how producers and exploration companies with a NI-43-101 compliant resource perform during bull and bear markets for precious metals.
All figures are in U.S. dollars unless otherwise stated.
|Mining Company||Company Stage||Primary Metal|
|Market Cap. |
Oct 31, 2019
|Market Cap. |
July 29, 2020
|Bull Market Performance|
(Nov. 1, 2019-July 29, 2020)
|Bear Market Performance
(Jan 02 – Dec 31, 2018)
|Auryn Resources||Exploration||Gold, Copper||$181M||$330M||60%||-39%|
|Wesdome Gold Mines Ltd.||Production||Gold||$1,104M||$1,885M||68%||110%|
|Red Pine Exploration||Exploration||Gold||$13M||$22M||29%||-55%|
|Revival Gold Inc.||Exploration/ |
|Erdene Resource Development||Exploration/ |
|Endeavor Mining Corp.||Production||Gold||$2,622M||$5,874M||54%||-13%|
|Yamana Gold Inc||Production||Gold||$4,572M||$8,279M||87%||-22%|
During the bear market period, the price of gold declined by 2.66%, and despite engaging in exploration activity, most companies saw a slump in their share prices.
In particular, exploration companies, or juniors, took a heavier hit, with returns averaging -31.66%. But even during a bear market, a discovery can make all the difference—as was the case for producer Wesdome Gold Mines, generating a 109.95% return over 2018.
- Average returns for gold producers including Wesdome: 24.83%
- Average returns for gold producers excluding Wesdome: -17.65%
During the bull market period for gold, gold mining companies outperformed the price of gold, with juniors offering the highest equity returns averaging 153.43%. Gold producers outperformed the commodity market, the value of their equities increased 69.61%—less than half of that of exploration companies.
Silver: Bears vs Bulls
Similar to gold mining companies, performances of silver producers and explorers reflected the volatility in silver prices:
|Company||Company Stage||Primary Metal|
|Market Cap. |
Oct 31, 2019
|Market Cap. |
July 29, 2020
|Bull Market Performance (Nov. 1, 2019-July 29, 2020)||Bear Market Performance (Jan 02 – Dec 31, 2018)|
|Pan American Silver||Production||Silver||$2,973M||$10,550M||125%||1%|
|Americas Gold and Silver||Production||Silver||$335M||$482M||10%||-56%|
|Dolly Varden Silver Corp.||Exploration||Silver||$28M||$74M||152%||-32%|
|Endeavour Silver||Production||Silver, Gold||$458M||$837M||72%||-10%|
During the bear market period for silver, its price decreased by 9.8%. Explorers and producers both saw a dip in their share prices, with the equity of silver producers decreasing by 21.63%.
However, the discovery of a high-quality silver deposit again made the difference for SilverCrest Metals, which generated a 116.85% return over the year.
- Average returns for silver exploration companies including SilverCrest: 8.32%
- Average returns for silver exploration companies excluding SilverCrest: -27.86%
On the other hand, during the bull market period, the price of silver increased by 34.33%. Silver exploration companies surpassed the performance of the price of silver.
- Average returns for silver producers: 69.04%
- Average returns for silver exploration companies: 95.36%
The potential to generate massive returns and losses is evident in both cases for gold and silver.
The Investment Potential of Exploration
Mining equities tend to outperform underlying commodity prices during bull markets, while underperforming during bear markets.
For mining exploration companies, these effects are even more pronounced—exploration companies are high-risk but can offer high-reward when it comes to commodity investing.
To reap the rewards of volatile returns, you have to know the risks and catch the market at the right time.
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