Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.

No statement is more true and better applicable to Wall Street than the famous warning of Santayana: "Those who do not remember the past are condemned to repeat it".

Successful investing is about managing risk, not avoiding it.

We have been trying to point out that this concept of an indefinitely favorable future is dangerous, even if it is true; because even if it is true you can easily overvalue the security, since you make it worth anything you want it to be worth. Beyond this, it is particularly dangerous too, because sometimes your ideas of the future turn out to be wrong. Then you have paid an awful lot for a future that isn't there. Your position then is pretty bad.

The function of the margin of safety is, in essence, that of rendering unnecessary an accurate estimate of the future.

The underlying principles of sound investment should not alter from decade to decade, but the application of these principles must be adapted to significant changes in the financial mechanisms and climate.

Investing isn't about beating others at their game. It's about controlling yourself at your own game.