by Thomas Murcko. CEO of BusinessDictionary.com

Warren Buffett is arguably the greatest investor of all time. But more importantly, hes also one of the best teachers of investing. In his annual reports and countless interviews, he freely offers priceless wisdom that helped him become a billionaire, and that you can use to invest better and reach your financial goals sooner. Here are some of the lessons Ive learned from him that have helped me achieve more success in investing, business, and life.

Stockpicking isnt a hobby.

[Extra for experts: market-weighted index mutual funds like VFINX hold more in stocks that have already risen and less in stocks that have already fallen, which reduces returns because stocks that are up tend to slightly underperform those that are down. As an alternative, consider RSP. the equal-weight S&P ETF from Rydex, which has historically outperformed market-weighted S&P index funds by 1-2% per year. ]

Ignore modern financial theory.

Invest in what you understand.

Stock ownership is business ownership.

Know what a good company looks like.

Be loss-averse.

Volatility is your friend.

Many investors think volatility is the same thing as risk, but its not. Being risk-averse doesnt mean avoiding volatility. Berkshire Hathaway stock has suffered a quotational loss of 50% or more three times in its history. But remarkably, Buffett has never lost more than 2% of his personal worth on any single position. He achieved this not by diversifying; indeed, he tends to be heavily concentrated, and at one point early in his career, he had 75% of his net worth in Geico. (Kids, dont try this at home!) He achieved it by buying good companies at good prices, and then buying more shares if prices fell. Dont fear the markets gyrations. Volatility is the best friend of the unemotional, patient, debt-free investor. A wildly fluctuating market means that solid businesses will occasionally be available for you to buy at irrationally low prices. Ben Graham said that the market is a voting machine in the short run and a weighing machine in the long run. If you buy good companies at good prices and the prices fall, you can be confident that eventually the market will realize the companies deserve to be priced higher, and in the unlikely event that they dont, you can wait and collect an ever-growing stream of dividends.

The market is there to serve you, not to inform you.

Think for yourself.

Be selectively contrarian.