The Snowball: Warren Buffett and the Business of Life — Book Notes

Alice Schroeder

Published: 2009

Get the book here: The Snowball (affiliate link)

Humility disarms.

“I will be talking about pricing stocks, but I will not be talking about predicting their course of action next month or next year. Valuing is not the same as predicting.

In the short run, the market is a voting machine. In the long run, it’s a weighing machine.

Weight counts eventually. But votes count in the short term. And it’s a very undemocratic way of voting. Unfortunately, they have no literacy tests in terms of voting qualifications, as you’ve all learned.”

“Interest rates — the cost of borrowing — are the price of “when.” They are to finance as gravity is to physics. As interest rates vary, the value of all financial assets — houses, stocks, bonds — changes, as if the price of birds have fluctuated.

And that’s why sometimes a bird in the hand is better than two birds in the bush, and sometimes two in the bush are better than one in the hand.”

Praise by name, criticize by category.

About Munger & Buffett: