This famous misquote is often used to justify the exact opposite of what Warren Buffett actually follows.
The Misquote
"Investing based on past trends is like driving while looking into the rearview mirror."
Warren Buffett (wrongly attributed)
This misquote is sometimes used to denounce financial analysis based on past numbers.
The Actual Quote
What Buffett actually wrote was:
"In the business world, unfortunately, the rear-view mirror is always clearer than the windshield."
Warren Buffett, Berkshire Hathaway: Letter to Shareholders (1991).
Some of the other variants he has used over the years are:
"Clearly, Berkshire’s results would have been far better if I had caught this swing of the pendulum. That may seem easy to do when one looks through an always-clean, rear-view mirror. Unfortunately, however, it’s the windshield through which investors must peer, and that glass is invariably fogged."
Warren Buffett, Berkshire Hathaway: Letter to Shareholders (2004).
"The rear-view mirror is one thing; the windshield is another."
Warren Buffett, Berkshire Hathaway: Letter to Shareholders (1989).
"Future profitability of the industry will be determined by current competitive characteristics, not past ones. Many managers have been slow to recognize this. It’s not only generals that prefer to fight the last war. Most business and investment analysis also comes from the rear-view mirror."
Warren Buffett, Berkshire Hathaway: Letter to Shareholders (1982).
In most of these instances, Buffett is saying that things always look easier in hindsight; or that it's easy to show better possible returns in retrospect.
The other idea Buffett is trying to convey is that future developments cannot be expected to mimic past trends. However, this is no way translates to making current evaluations based on projections about the future.
Both Buffett and his mentor, Benjamin Graham, have spoken about the futility of financial projections on multiple occasions.
Other Misquotes
This is another instance where an insightful quote has been misstated to convey something completely different from what the speaker intended.
There are other common Value Investing misquotes attributed to Buffett, Graham and Charlie Munger as well.
Benjamin Graham
Buffett once wrote a detailed article explaining how Benjamin Graham's record of creating exceptional investors (such as Buffett himself) is unquestionable, and how Graham's principles are everlasting. The article is called The Superinvestors of Graham-and-Doddsville [PDF].
Graham's actual Value Investing framework only uses objective past and current figures.