10 Quotes to Invest By, via Warren Buffett and H&R Block

In “The Warren Buffett Book of Investing Wisdom,” published in 2021, Bloch offers 350 gems in Buffett’s own words, straight out of Berkshire Hathaway’s annual reports. The tome is an expanded version of Bloch’s collection of 284 quotes published six years earlier.

At 73, Bloch — that’s the spelling of the family name — is the retired 30-year program officer of the H&R Block Foundation (The “R” was Henry’s late brother Richard) and treasurer and director of the Marion and Henry Bloch Family Foundation.

In the interview, Bloch discusses 10 of the 350 quotes, including why Buffett wants to buy companies “when they’re on the operating table.” He also reveals how he has improved as an investor by poring over Buffett’s shareholder letters and how his father and Buffett differed in their approach to investing.

Here are highlights of our conversation:

THINKADVISOR: What inspired you to put together this book?

ROBERT BLOCH: Warren Buffett changed my life as far as investing is concerned. I didn’t really know what I was doing. I was way too emotional about stuff and didn’t think long term. I had tried to outsmart the market.

When the market collapsed in 2008, I went from about 47% equities to, like, 6%, which was absolutely stupid. I needed a mentor.

And that was Warren Buffett?

Yes. I thought, who’s better at investing than Warren Buffett? So I started collecting quotes from his Berkshire Hathaway annual report shareholder letters. Eventually, they were a book.

Didn’t your father, Henry Bloch, who co-founded H&R Block, teach you about stock market investing?

No. My dad didn’t help me with that. I had to learn it myself. My dad liked bonds. He was very conservative.

Let’s talk about some of Buffett’s investing gems that you have in the book. For example: “… [Pundits’] short-term market forecasts are poison and should be kept locked up … away from grownups who behave in the market like children.”

His opinion about market pundits is repeated with different quotes in the book because that’s very important to him.

Some equity investing advice: “Your goal … should simply be to pursue, at a rational price, a part-interest in an easily understandable business whose earnings are virtually certain to be materially higher five, 10 and 20 years from now.

“… only a few companies meet these standards. When you [find one], buy a meaningful amount of stock. If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.”

That’s hard, especially if it goes down. But it’s very true. That’s exactly what Buffett does [with a few exceptions], and it works out.

Another excellent one: “If a business is attractive enough to buy once, it may well pay to repeat the process.” Have you followed his recommendation?

Yes. I bought more Microsoft. My cost went up, but it’s a good, strong company, especially [its featuring] AI.

Buffett says: “Great investment opportunities come when excellent companies are surrounded by unusual circumstances that cause the stock to be misappraised …” and “The best thing that happens to us is a great company get[ting] into temporary trouble. … We [he and partner Charlie Munger] want to buy them when they’re on the operating table.”

Buffett says that even if a stock goes way down temporarily and you think it will be the same great company long term, go ahead and buy. It’s better to buy at that time.

That stock can go down for a variety of reasons, like the company made some mistake or because of an acquisition or earnings.

Most people get scared when the price goes down, but Buffett doesn’t.

Plus: “Do not take yearly results too seriously. Instead, focus on four- or five-year averages.”

Exactly. The market usually does well over time, but not every year. You’re going to have a couple of bad years once in a while. But you have to ride them out.

Take being scared out of [the equation]. If you get a lot of losses, it’s dangerous. But [some] losses are part of the game. After that, you’ll go up.

More insight: “We aren’t looking at the stock. We’re looking at the aspects of the business … not ticker symbols to be bought and sold based on their ‘chart’ patterns, ‘target’ prices of analysts or the opinion of media pundits.”

People have to look at the business underneath the stock: Are they profitable? Do they have a moat around them? Are they unique?

The “Oracle of Omaha” recommends too: “If you’re not going to be an active investor, just stay with index funds — any low-cost index fund, and buy it over time, not all at once.”

That’s what most people should do. It’s how I invest for my 29-year-old son. Investing isn’t his cup of tea.

Summing up: “Stocks are simple. All you do is buy shares in great businesses for less than the business is intrinsically worth, with managers of the highest integrity and ability. Then you own those shares forever.”

He's owned Coca-Cola forever. He has a knack for finding great companies because he knows how to analyze them. And — I think he’s addicted to drinking Coke.

This one is a bit puzzling: “I am not a businessman. I’m an artist.” What do you think he means?

Perhaps he was saying that when you design and execute a painting, it’s similar to executing an investment portfolio.

Once you started studying Buffett’s shareholder letters, did you keep investing in stocks?

I went into a mutual fund I liked a lot and a few stocks. I should have bought some index funds.

Buffett doesn’t diversify much for Berkshire Hathaway, though he recommends that most people should.

Did you have a financial advisor in the 2008 meltdown?

No. Many years before, Mario Gabelli was my advisor. Now my advisor is [son] Nicholas, who’s part of a [financial services] partnership. He does ETFs and private equity.

When my dad died [at age 96], I gave him money, and he’s done well.

Do you watch the market every day?

I do. My stocks are on my phone; so I can see them immediately. But I don’t buy and sell very often.

How are you doing in the market now?

I don’t figure out percentages every year [to compare]. I’m doing decently. I don’t know if I’m doing unbelievably. But I’m happy.

Have you become a less emotional investor?

I’m much better than I was but not perfect. Buffett says, “If you can’t control your emotions, you can’t control your stocks.”

You state that you received Buffett’s written permission to publish your books. Please elaborate.

When I did the [first book], I couldn’t find a publisher and wrote to him asking how to speed up the process with my literary agent and sent him the manuscript.

He replied by hand on the bottom of my letter: “Book publishing is a tough game. … There has been so much written on me that it will be hard to generate large sales.

“Only suggestion is to pay your agent only if he/she gets results.”

He saw both [manuscripts] and approved them.

Have you ever met him?

Once, briefly, at the Berkshire Hathaway annual meeting in 2004. We were in Borsheims [the jewelry store], and I introduced myself. [He was a major shareholder of H&R Block at the time.]

What is it that you like about Buffett as a person?

He has all the qualities that I admire: He’s rational, very witty, down-to-earth, not materialistic.

He’s got all the traits that remind me of my dad.