Over a decade ago, I had the good fortune to meet Warren Buffett when he became a major shareholder in H&R Block, the tax preparation company my father, Henry Bloch, co-founded in 1955.

Warren and my father have much in common. Both entrepreneurs were born before World War II in the Mid-West and came from middle class families. They are extremely down to earth and have loads of good common sense and honesty. Without a doubt, both enjoy "the process more than the proceeds" of business and investing.

Buffett's investment principles are "simple, old, and few." Much like my father, most of Warren's success is due to his personality, character, and willingness to learn from and teach others. Of his many outstanding qualities, the role as teacher is the one for which, Warren states, he would most like to be remembered.

Recently I have made Warren my teacher and mentor by reading and re-reading his quotes until they have become a part of me. As the "Oracle of Omaha" said, "It's better to hang out with people better than you. Pick out associates whose behavior is better than yours and you'll drift in that direction." As investors, we should all strive to drift toward Warren's direction.

There have been dozens of books published that have attempted to capture the philosophy and personality of Warren Buffett; but words cannot really describe this amazing man ... except maybe his own words. Buffett does Buffett better than anyone. Since Warren has never written an autobiography, the quotes in this book are the most direct and unfiltered source we have.

After experiencing several bear markets over his lifetime, Warren has learned to stay the course and stick to his investing principles, when other investors were selling or rethinking their strategies. Therefore a proven discipline is an essential element in becoming a successful investor. This book has helped me become a more disciplined investor.

I am confident it will not only help you become more disciplined but also a more RATIONAL, OPTIMISTIC, and LONG-TERM investor. The ultimate act of generosity is Warren Buffett sharing his genius with the individual investor!

— Robert L. Bloch

Note: I am honored that Warren Buffett has given me written permission to use his inspiring words in this volume.

Opportunities abound in America.

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In the business world, the rearview mirror is always clearer than the windshield.

American business will do just fine over time. And stocks will do well just as certainly, since their fate is tied to business performance. Periodic setbacks will occur, yes, but investors and managers are in a game heavily stacked in their favor. (The Dow Jones Industrials advanced from 66 to 11,497 in the twentieth century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression, and many recessions. And don't forget that shareholders received substantial dividends throughout the century as well.)

Risk comes from not knowing what you are doing.

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Since the basic game is so favorable, Charlie and I believe it's a terrible mistake to try to dance in and out of it based upon the turn of tarot cards, the predictions of "experts," or the ebb and flow of business activity. The risks of being out of the game are huge compared to the risks of being in it.

It is more important to say "no" to an opportunity, than say "yes."

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Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.

It's better to hang out with people better than you. Pick out associates whose behavior is better than yours and you'll drift in that direction.

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To swim a fast 100 meters, it's better to swim with the tide than to work on your stroke.

Wall Street is the only place that people ride to in a Rolls-Royce to get advice from those who take the subway.

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I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years.

Buy companies with strong histories of profitability and with a dominant business franchise.

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Rule No. 1: Never lose money. Rule No. 2: Don't forget No. 1.

When I buy a stock, I think of it in terms of buying a whole company, just as if I were buying the store down the street. If I were buying the store, I'd want to know all about it. I mean, look at what Walt Disney was worth on the stock market in the first half of 1966. The price per share was $53, and this didn't look especially cheap; but on that basis, you could buy the whole company for $80 million when "Snow White," "Swiss Family Robinson," and some other cartoons, which had been written off the books, were worth that much; and then you had Disneyland and Walt Disney, a genius, as a partner.

You don't want a capital market that functions perfectly if you're in my business. People continue to do foolish things no matter what the regulation is, and they always will.

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We went from a wooded land to an incredible, absolute abundance of riches because the United States has had a system that can unleash human potential. Never bet against what humans can accomplish if they're operating in the right soil. And we have the right soil.

The products or services that have wide, sustainable moats around them are the ones that deliver rewards to investors.

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You only find out who is swimming naked when the tide goes out.

A great investment opportunity occurs when a marvelous business encounters a one-time huge, but solvable problem.

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We believe that a policy of portfolio concentration may well decrease risk if it raises, as it should, both the intensity with which an investor thinks about a business and the comfort level he must feel with its economic characteristics before buying into it.

I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.

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Overall, we've done better by avoiding dragons than by slaying them.

Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.

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It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

People who buy [stocks] for non-value reasons are likely to sell for non-value reasons. Their presence in the picture will accentuate erratic price swings unrelated to underlying business developments.

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With enough insider information and a million dollars, you can go broke in a year.

If you are not going to be an active investor — and very few should try to do that — then they should just stay with index funds. Any low-cost index funds. And they should buy it over time. They're not going to be able to pick the right price and the right time. What they want to do is avoid the wrong price and the wrong stock. You just make sure you own a piece of American business, and you don't buy all at one time.

A truly great business must have an enduring "moat" that protects excellent returns on invested capital. Business history is filled with "Roman candles," companies whose moats...