Words of Wisdom

     Warren Buffett is chairman and CEO of Berkshire Hathaway, a hugely successful conglomerate of businesses and corporate interests based in Omaha, Neb. In preparation for the annual meeting of the company, to be held in May, Buffett last week published his annual letter to shareholders (here are highlights if you don't want to see the whole thing), which has become a kind of bible for long-term stock investors.

My favorite Berkshire product: See's candy

     Warren Buffett has made millions and billions for himself and his fellow investors. But even he is not perfect. For example, he admitted recently that he drinks five Cokes a day. He owns a lot of shares of Coca-Cola, and so he is essentially buying from himself, but the average health expert would be aghast if you told her you drink five Cokes a day. Yet there's nothing average about Warren Buffett -- he's 83 years old and still going strong, despite the overdose of high fructose corn syrup he pours down his throat every day.

     So maybe you don't want to take health advice from the so-called Oracle of Omaha. But you know he's doing something right, certainly in business and probably in life as well. Here are a few samples of the wit and wisdom of Warren Buffett:

     On the stock market:  "The market, like the Lord, helps those who help themselves. But, unlike the Lord, the market does not forgive those who know not what they do."

     On his company's bare-bones bureaucracy:  "A compact organization lets all of us spend our time managing the business rather than managing each other."

     On trust but verify:  "All managements say they're acting in the shareholders' interests. What you'd like to do as an investor is hook them up to a machine and run a polygraph to see whether it's true."

     On administrative bloat:  "Managers who want to expand their domain at the expense of owners might better consider a career in government."

     On government regulation:  "There are significant limits to what regulation can accomplish. People continue to do foolish things no matter what the regulation is, and they always will."

     On investor thinking:  "Man's natural inclination is to cling to his beliefs, particularly if they are reinforced by recent experience -- a flaw in our makeup that bears on what happens during bull markets and extended periods of stagnation."

     On opportunity:  "A true investor welcomes volatility because a wildly fluctuating market means that irrationally low prices will periodically be attached to solid businesses."

A collection of Buffett articles

     On emotions:  "Investors should remember that excitement and expenses are their enemies ... If they insist on trying to time their participation in equities they should be fearful when others are greedy and greedy only when others are fearful."

     On expectations:  "You and I can sell each other stocks at higher and higher prices. You personally might outsmart the next fellow ... but bear in mind that investors as a whole cannot get anything out of their businesses except what the businesses earn."

     On bad businesses:  "When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact."

     On inheritance:  "The perfect amount to leave children is enough money so they would feel they could do anything, but not so much that they could do nothing."

     On philanthropy:  "In my own case, 99%-plus of my wealth will go back to society, because I've been treated extraordinarily well by society."