The wit and wisdom of Warren Buffett

November 19, 2012, 10:00 AM UTC

Playing bridge with Carol Loomis in 1988, Warren Buffett displays what he calls “the strongest part of my game.”

FORTUNE — Fortune met Warren Buffett by accident in 1966. I was writing an investing article about another man, Alfred Winslow Jones, who wasn’t famous at that moment, but was about to be because of the article. Jones was running something called a hedge fund, and Fortune’s description of what that was and how Jones operated started a miniboom in the hedge fund business. Buffett Partnership Ltd. — a sort of competitor of Jones’s fund — got a single line in the article. To my everlasting dismay, I misspelled Buffett, giving it only one “t.”

A bit later, my husband, John Loomis, met Buffett and came home saying, “I think I have just met the smartest investor in the country.” I’m sure my eyes rolled. But then I, too, got to know Warren (and his wonderful late first wife, Susie) and realized how impressive this largely unknown fellow was. The Loomises bought stock in his small company, Berkshire Hathaway (BRKA); we became good friends of the Buffetts; and ultimately I became the pro bono editor of his increasingly famous annual letter to shareholders.

Meanwhile, Fortune set off on a long-term course of covering Buffett. He got two paragraphs and a picture in a 1970 Fortune story called “Hard Times Come to the Hedge Funds” — his fund was a rarity, having 13 straight years of profits — and by 1977 we were running a 7,000-word piece by Buffett on “How Inflation Swindles the Equity Investor.”

Now, 46 years after Fortune first met the man, we have a book, Tap Dancing to Work, that collects everything important we’ve done about him (and some lighter stuff too), with commentary written by me. All the articles mentioned above, from the A.W. Jones story on, are in it — and that’s just the start. In total, the book is a Buffett banquet.

What follows are some choice quotes from its pages and a selection of photographs that mark the passing of time, as Buffett grew into an investor/manager/philanthropist whose place in history is assured. One thing is certain: We are awfully glad to have been there as it happened.

A coda: In 1966, when Fortune first met Warren Buffett, Berkshire’s stock (today’s Class A) was $22. In early November, it was about $130,000.


Buffett in 1970, as he was closing down his hedge fund

January 1970: Hard times come to the hedge funds
“Buffett’s record has been extraordinarily good. In his thirteen years of operation … he compounded his investors’ money at a 24% annual rate … [Now] Buffett is quitting the hedge fund game.”

May 1977: How inflation swindles the equity investor
“Most of those in public office, quite understandably, are firmly against inflation and firmly in favor of policies producing it,” wrote Buffett.


Aug. 22, 1983: Letters from chairman Buffett
“The market, like the Lord, helps those who help themselves. But, unlike the Lord, the market does not forgive those who know not what they do.”

Dec. 26, 1983: Can you beat the stock market?
In investing, says Buffett, “you wait for the 3 and 0 pitch.”

In 1985, photographed in his office (the same he uses today) for a story about his out-of-the-box purchase of Whoops municipal bonds

Jan. 20, 1986: Merger fees that bend the mind
“Buffett is so smart,” remembers Bruce Wasserstein, “that you had to be careful to avoid being picked.”

Sept. 29, 1986: Should you leave it all to the children?
“Would anyone say the best way to pick a championship Olympic team is to select the sons and daughters of those who won 20 years ago? [That would be] a crazy way for a society to compete.”

Dec. 7, 1987: Early fears about index futures
“We do not need more people gambling in nonessential instruments identified with the stock market in this country, nor brokers who encourage them to do so … We need the intelligent commitment of investment capital, not leveraged market wagers.”

April 11, 1988: The inside story of Warren Buffett
“With few exceptions, when a manager with a reputation for brilliance tackles a business with a reputation for poor fundamental economics, it is the reputation of the business that remains intact.”

Oct. 30, 1989: Are these the new Warren Buffetts?
“You don’t need a rocket scientist. Investing is not a game where the 160 IQ guy beats the guy with the 130 IQ … Rationality is essential when others are making decisions based on short-term greed or fear. That is when the money is made.”


April 22, 1991: Buffett buys junk
“There are a lot of things I wish I’d done in hindsight. But I don’t think much of hindsight generally in terms of investment decisions. You only get paid for what you do.”

Jan. 10, 1994: Now hear this
“Paul Mozer’s paying $30,000 and is sentenced to prison for four months. Salomon’s shareholders — including me — paid $290 million, and I got sentenced to 10 months as CEO.”

Buffett and singer Jimmy Buffett swap attire in 1999.

March 20, 1995: Untangling the derivatives mess
“Buffett says he’d deal with derivatives by requiring every CEO to affirm in his annual report that he understands each derivatives contract his company has entered into. ‘Put that in,’ says Buffett, ‘and I suspect you’ll fix up just about every problem that exists.’ ”

Feb. 5, 1996: Gates on Buffett
“You should invest in a business that even a fool can run, because someday a fool will.”

Oct. 27, 1997: Warren Buffett’s wild ride at Salomon
Looking back at the Salomon crisis: Once Buffett became interim chairman, he was asked by a reporter how he would handle needing to be in both New York and Omaha. “My mother has sewn my name in my underwear, so it will be all right,” he answered.

July 20, 1998: The Bill and Warren show
“In most acquisitions, it’s better to be the target rather than the acquirer. The acquirer pays for the fact that he gets to haul back to his cave the carcass of the conquered animal.”

Nov. 22, 1999: Mr. Buffett on the stock market
“I think it’s hard to come up with a persuasive case that equities over the next 17 years will perform anything like — anything like — they’ve performed in the past 17. If I had to pick the most probable return, from dividends and appreciation combined, that investors in aggregate … would earn … it would be 6%.”


Feb. 19, 2001: The value machine
“[Berkshire] reminds me of Mickey Mouse as the Sorcerer’s Apprentice in Fantasia. His problem was floods of water. Ours is cash.”

Dec. 10, 2001: Warren Buffett on the stock market
“To refer to a personal taste of mine, I’m going to buy hamburgers the rest of my life. When hamburgers go down in price, we sing the ‘Hallelujah Chorus’ in the Buffett household. When hamburgers go up in price, we weep. For most people, it’s the same with everything in life they will be buying — except stocks. When stocks go down and you can get more for your money, people don’t like them anymore.”

Nov. 11, 2002: The oracle of everything
“The bubble has popped, but stocks are still not cheap …”

Buffett and Bill Gates in 2010, at a Hollywood Diner near Omaha, where they made plans to announce the Giving Pledge

March 17, 2003: Avoiding a mega-catastrophe
“Derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”

March 11, 2005: The best advice I ever got
“I had $9,800 at the end of 1950 and by 1956, I had $150,000. I figured with that I could live like a king.”

July 10, 2006: Warren Buffett gives it away
“I know what I want to do, and it makes sense to get started.”

April 28, 2008: What Warren thinks
“It seems everybody says [the recession] will be short and shallow, but it looks like it’s just the opposite. You know, deleveraging by its nature takes a lot of time, a lot of pain.”

June 23, 2008: Buffett’s big bet
“A number of smart people are involved in running hedge funds. But to a great extent, their efforts are self-neutralizing, and their IQ will not overcome the costs they impose on investors. Investors, on average and over time, will do better with a low-cost index fund than with a group of funds of funds.”

July 6, 2010: My philanthropic pledge
“My wealth has come from a combination of living in America, some lucky genes, and compound interest … My being [born] male and white also removed huge obstacles that a majority of Americans then faced … Fate’s distribution of long straws is wildly capricious.”

Adapted from Tap Dancing to Work: Warren Buffett on Practically Everything, 1966–2012, collected and expanded by Carol J. Loomis, published by Portfolio/Penguin, on sale Nov. 21, 2012. © 2012 Time Inc.

A shorter version of this story appeared in the December 3, 2012 issue of Fortune