By Tom Bradley

It would be an oversight to do a series of postings on Warren Buffett’s 2008 Letter to the Shareholders of Berkshire Hathaway and not review some of the great quotes and analogies.

On the current investing environment: “Things also went well on the capital-allocation front last year. Berkshire is always a buyer of both businesses and securities, and the disarray in markets gave us a tailwind in our purchases. When investing, pessimism is your friend, euphoria the enemy.”

On their derivative strategies: “The ups and downs neither cheer nor bother Charlie and me.  Indeed, the 'downs' can be helpful in that they give us an opportunity to expand a position on favorable terms.”

On the mortgage mess: “Writing about the period...I described it as involving borrowers who shouldn’t have borrowed being financed by lenders who shouldn’t have lent.”

On the mono-line insurers that moved away from their core business of insuring tax-exempt municipal bonds: “By yearend 2007, the half dozen or so companies that had been the major players in this business had all fallen into big trouble. The cause of their problems was captured long ago by Mae West: “I was Snow White, but I drifted.”

On investing psychology: “Approval...is not the goal of investing. In fact, approval is often counter-productive because it sedates the brain and makes it less receptive to new facts or a re-examination of conclusions formed earlier.  Beware the investment activity that produces applause; the great moves are usually greeted by yawns.”