Investors should remember that their scorecard is not computed using Olympic-diving methods: Degree-of-difficulty doesn't count. If you are right about a business whose value is largely dependent on a single key factor that is both easy to understand and enduring, the payoff is the same as if you had correctly analyzed an investment alternative characterized by many constantly shifting and complex variables.

In fact, in my adult lifetime, I don't think I've ever seen people as fearful economically as they are right now.

Intrinsic value can be defined simply: It is the discounted value of the cash that can be taken out of a business during its remaining life. The calculation of intrinsic value, though, is not so simple. As our definition suggests, intrinsic value is an estimate rather than a precise figure, and it is additionally an estimate that must be changed if interest rates move or forecasts of future cash flows are revised.

I checked the actuarial tables, and the lowest death rate is among six-year-olds. So I decided to eat like a six-year-old.

Don't risk what is important to you, to get what is not important to you.

Derivatives are like sex. It's not who we're sleeping with, it's who they're sleeping with that's the problem.

As an investor with small capital, one should prefer businesses that have high returns on capital and that require little incremental investment to grow.