(Warren Buffet Questions and Answers) Flashcards

Buffett won a famous 10-year bet that an S&P 500 index fund would beat a basket of:

Answer: hedge funds

Buffett bet in 2007 that an index fund would outperform hedge funds over ten years, and he won.

Buffett describes the stock market as a device for transferring money from the impatient to the:

Answer: patient

Buffett stresses that patience rewards long-term investors.

Rule No. 1 in Buffett's investing philosophy is:

Answer: Never lose money

Buffett's Rule No. 1 is never lose money, and Rule No. 2 is never forget Rule No. 1.

Buffett says price is what you pay; ___ is what you get.

Answer: value

This quote highlights the distinction between market price and intrinsic value.

Buffett's preferred measure of a business's worth, based on future cash flows, is its:

Answer: intrinsic value

Buffett buys when market price is below his estimate of intrinsic value.

Graham's allegory of 'Mr. Market,' embraced by Buffett, portrays the market as a moody:

Answer: business partner offering daily prices

Mr. Market is an emotional partner who quotes prices daily, which a wise investor can exploit or ignore.

Buffett generally favors companies that generate high returns on:

Answer: equity

A consistently high return on equity is a hallmark of the businesses Buffett seeks.