Food for thought from the 2007 Berkshire Hathaway AGM:

Q [from 17-year-old shareholder]: What is the best way to become a better investor? Get an MBA, is it genetic, read more Poor Charlie's Almanac?

WARREN BUFFETT: Read everything you can. In my own case, by the time I was 10, I read every book in the Omaha public library that had to do with investing, and many I read twice. You just have to fill up your mind with competing thoughts and then sort them out as to what makes sense over time. And once you've done that, you ought to jump in the water. The difference between investing on paper and in real money is like the difference in just reading a romance novel and…doing something else. The earlier you start the better in terms of reading. I read a book at 19 that formed my framework ever since [Benjamin Graham's The Intelligent Investor]. What I'm doing today at 76 is running things in the same thought pattern that I got from a book at 19. Read, and then on small scale do some of it yourself.

CHARLES MUNGER: Sandy Gottesman runs a large and successful investment operation. Notice his employment practices. When someone comes in to interview with Sandy, no matter his wage, Sandy asks, “What do you own and why do you own it?” And if you haven't been interested enough in the subject to know, you better go somewhere else.

WB: If you buy a farm, you'd say “I'm buying this because I expect it to produce 120 bushels per acre, etc…" from your calculations, not based on what you saw on television that day or what a neighbor said. It should be the same thing with stock. Take a yellow pad, and say, I'm going to buy GM for $18 billion, and here's why. And if you can't write a good essay on the subject, you have no business buying one share.
- posted by cjb @ 5:06 PM