Warren Buffett's 7 Pearls of Wisdom

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"In 1966, he was the proprietor of an un-famous hedge fund and the controlling shareowner and de facto CEO of a small New England textile company, Berkshire Hathaway, with $49 million in annual revenues. By 2011, Berkshire was No. 7 in the Fortune 500, with $144 billion in revenue. Few others within his lifetime have taken a company from obscurity to the top 10 of the 500." As for Berkshire's market value (a measure Loomis says Buffett respects much more than sales), Berkshire in 2011 ranked 9th in the Fortune 500, with $202 billion.

7 Pearls of Warren's Wisdom:

-Where Amateur Investors Should Invest: "They should just stay with index funds. Any low-cost index fund. And they should buy it over time. You just make sure you own a piece of American business, and you don't buy all at one time."

-The Right Amount of Money to Leave Your Kids: "Enough so they would feel they could do anything, but not so much that they could do nothing." In 1986, Buffett estimated that the right amount to leave a child who was a college graduate would be "a few hundred thousand dollars."

-Foreigners Will Never Flee The Dollar. "The fact is that foreigners—as a whole—cannot ditch their dollars. Indeed, because our trade deficit is constantly putting new dollars into the hands of foreigners, they have to just as constantly increase their U.S. investments."

-Be Happy Now: "I always worry about people who say, 'I'm going to do this for 10 years; I really don't like it very well. And then I'll do this…' That's a little like saving up sex for your old age. Not a very good idea."

-The Internet Won't Change Chewing Gum. "When I look at the Internet, I try to figure out how an industry or a company can be hurt or changed by it, and then I avoid it. Take Wrigley's. I don't think the Internet is going to change the way people chew gum."

-Picking Causes Is Harder Than Picking Stocks: "In stocks, you're looking for things that are obvious and easy to do. You try to identify the one-foot bars you can step over. But when you give in the charitable arena, you are attacking problems that have been the most intractable and resistant to solution throughout history."

-Choose Colleagues Carefully: "When you go out to work, work for an organization of people you admire, because it will turn you on." The reason he's happy, he says, and why he tap dances to work is, "I don't have to associate with anybody who causes my stomach to churn."

The author of this story was a writer at Fortune and several of his magazine pieces appear in the book.

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