Interesting learnings from the book “Poor Charlie’s Almanack”

We read this fascinating book and have been enamoured by the learnings from it. A fraction of the learnings have been listed below. Hope you find them useful:

• The big money is not in the buying and selling… but in the waiting
• Investors should purchase stocks like they purchase groceries—not like they purchase perfume
• You are neither right or wrong because the crowd disagrees with you. You are right because your data and reasoning are right
• A great business at a fair price is superior to a fair business at a great price
• Understanding the power of compound interest and the difficulty of getting it is the heart and soul of understanding a lot of things
• I think track records are very important. If you start early trying to have a perfect one in some simple thing like honesty, you’re well on your way to success in this world
• Ability will get you on the top but it takes character to keep you there
• Our game is to recognize a big idea when it comes along, when one doesn’t come along very often. Opportunity comes to the prepared mind
• One of the great defenses if you’re worried about inflation is not to have a lot of silly needs in your life
• In my whole life, I have known no wise people who didn’t read all the time – none, zero
• Change, as in the case of the Internet, can be the friend of the society. But it is the absence of change that is often the friend of the investor. We like stable businesses like a chewing gum, which cannot be changed by the Internet. We like to leave life’s more unpredictable things to someone else
• The big people don’t always win… as you get big you get the bureaucracy
• There’s brand identity factor in cereals that doesn’t exist in airlines. That makes cereal maker more valuable
• The great lesson in microeconomics is to discriminate between when technology is going to help you and when it’s going to kill you
• You have to figure out what your own aptitudes are. If you play games where other people have the aptitudes and you don’t, you are going to lose
• The iron rule of life is that only 20% of the people can be in top fifth
• Betting on the quality of business is better than betting on the quality of management
• Trying to minimize taxes too much is one of the great standard causes of really dumb mistakes
• Anytime somebody offers you a tax shelter from hereon in life, don’t buy it. People have made terrible mistakes by being overly motivated by tax consideration
• There are huge advantages for an individual to get into a position where you make few great investments and just sit tight on your ass. You’re paying less to brokers. You’re listening to less nonsense
• You don’t have to be brilliant, only a little bit wiser than the other guys, on an average, for a long long time, to be more successful
• Succeeding in a low tech business can be pretty hard. Just try to open a restaurant and make it succeed
• The man who doesn’t read good books has no advantage over the man who can’t read them
• Teachers open the door but you must enter by yourself
• Not ignorance, but ignorance of ignorance is the death of knowledge
• Fools act on imagination without knowledge, pedants act on knowledge without imagination
• Civilizations can only be understood by those who are civilized
• Almost all new ideas have a certain aspect of foolishness when they are first produced
• It is paradoxical and disturbing to see economists praising foolish spending as a necessary ingredient of a successful economy
• One should recognize reality especially when one doesn’t like it
• Meetings are indispensable when you don’t want to do anything
• The only function of economic forecasting is to make astrology look respectable
• Capitalism works best when there is trust in the system
• People are not disturbed by things, but, by the view they take of them
• Wealth consists not in having great possessions, but in having few wants
• In your own life, what you want to maximize is a seamless web of deserved trust