Wisdom From Omaha

Here are some words of wisdom from superinvestors Warren Buffett and Charlie Munger from their recent Berkshire Hathaway annual meeting. They're paraphrased:

On trying to time the market: We don't try to pick bottoms. Sitting around and not doing something sensible (such as buying an attractively priced stock) because you think there might be a better price later doesn't make sense. Picking bottoms is not our game — it's impossible.

On retailers today: The recent drop in consumer spending and its effect on the retailing, manufacturing and services industries could last quite a long time. I would not look for any quick rebound.

On stock repurchases: I think 90 percent of the repurchase activity I've seen in last five years didn't benefit shareholders — I think it's because management thought it was the right thing to do and investor relations said to do it. We will never buy our stock at a silly price. Much of corporate America has done that over the years.

On the role of stock prices: Why would anybody sell Wells Fargo at $9 per share when they bought it at $25? People with stocks let a price tell them how they should feel about the company instead of looking at the business. (Remember that a stock's price doesn't tell you everything. If a stock's price falls, ask yourself if the company is really worth less, and if you think it will earn less money in the future. Often, the answer is no.)

On the future: There are always a lot of things wrong with the world, but it's the only world we've got. Over time people will live better and better in this country. We have a system that works, that unleashes human potential. Our economy is sputtering right now, but your kids will live better than you live.

Learn more in Buffett's letters to shareholders at www.berkshirehathaway. com and in Alice Schroeder's book, "The Snowball: Warren Buffett and the Business of Life" (Bantam, $35) and Roger Lowenstein's, "Buffett: The Making of an American Capitalist" (Random House, $19).