You don't lose when markets panic, you lose when you panic.
Devang Mehta
“ ”
The amateur does not know what to do.
The master knows what not to do.
When I have a client who "loves how Rubin invests" but gets that itch to swing the bat, I encourage them to create a cowboy account. Go take 5% of your money and do whatever the hell you want — if it increases the odds you won't touch the other 95%
..... get your kicks that enable you to stay in your seat.
Rubin Miller
No matter how great a stock picker you are, remember one thing: the majority of your returns will be driven by the macro cycle of the market.
Hence timing the macro cycle is not just critical, but essential.
The more interventionist the authorities, the more intense the next mania because some of the lenders and investors will extend credit in the belief that they will be bailed out.
The market's job is to make you abandon your strategy at the worst possible time.
As the manager of your portfolio, you should do one thing really well, which is to be a methodical implementer of a predesigned plan.
Rubin Miller
The most famous Fama-French paper, The Cross-Section of Expected Returns (1992), helped cohesively explain investment returns, suggesting that while the outcomes from picking individual stocks are typically too random to delineate luck from skill, there IS explanatory power about investment returns if you instead look at groups of stocks, (e.g. small companies vs. large companies)... Rubin Miller
"People calculate too much and think too little"
Charlie Munger
Most investors obsess over numbers
(PE ratios, margins, earnings growth)
But the best investors think differently. In terms of long-term trends.
No expert is needed in a bull market
And no expert can help you in a bear market.
In any country, parochial cartels and lobbies tend to accumulate over time, until they begin to sap the economic vitality of the nation.
Mancur Olson
• Not having FOMO (Fear Of Missing Out) is the single most important financial skill. It's so important that you cannot imagine accumulating significant wealth during your lifetime if you are suseptible to FOMO. If there is really one thing, the one strength that you want that will allow you to accumulate wealth, it is the lack of FOMO.
• Wealth is the money you don't spend.
• My investment strategy is to own index funds for as long as I can. To be average for an above average period of time. Over a period of time it will put you in the top decile.
• Investing is one of the very few endeavours in life where the harder you try the worse you're going to do.
• You can learn how to be poor with dignity.
• Don't think that all poverty is due to laziness and don't think that all wealth is due to hard work.
You want a wide funnel and a tight filter.
Patrick O'Shaugnessy
I always like to look at investments without knowing the price because if you see the price, it automatically has some influence on you.
Warren Buffett
“ ”
Market forecasters will fill your ear but will never fill your wallet
Warren Buffett
Historic data suggests 99% of small caps are duds in the long run
I confess that, in 1901, I said to my brother Orville that men would not fly for 50 years. Two years later, we were making flights. This demonstration of my inability as a prophet gave me such a shock that I have ever since refrained from all prediction.
Wilbur Wright, who worked with his brother to create the first successful airplane
The speed in which you made your wealth is the halflife for how fast you can lose it. Double your money in a year? Don’t be surprised when you lose half of it just as quickly.
At the Berkshire Hathaway shareholder meeting in 2013 Warren Buffett said he's owned 400 to 500 stocks during his life and made most of his money on 10 of them.
12 Thoughts on Incentives
1. Don’t ask your barber if you need a haircut.
2. “I can fix the $32 trillion US debt problem in 5 minutes. You pass a law that when there’s a deficit of more than 3% of GDP, all sitting members congress are ineligible for re-election” - Warren Buffett
3. 33% of British criminals were dying en route to Australia in the 1700s.
Britain switched from paying sea captains for every passenger who walked on the ship to paying them for every passenger who walked off. Immediately, the survival rate shot up to 99%.
4. How to waste your time: Try to defy the laws of physics – or try to get a man to understand something when his salary depends on his not understanding it.
5. “Never attribute to conspiracy what is more easily explained by incentives and incompetence.” - Naval Ravikant
6. During the 1980’s, the government of Athens came up with an idea to limit pollution: Odd-numbered and even-numbered license plates. On dates with an odd number, the odd plates could drive. And vice versa.
The rich people just bought another car – with even worse emissions. The streets got more jammed and the pollution got worse.
7. “If you reward profits alone, it’s the dumbest thing you could do. Employees will quit advertising and start shrinking the business” - Warren Buffett
8. If video games teach us one thing: If you want to motivate humans, frequent rewards are more addicting than one-off rewards.
9. In Hungary, every woman who gives birth to 4 children or more never has to pay income tax.
Prediction for the next 2 decades: As populations decline, every government will be focused on child-bearing incentives.
10. “I think I’ve been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I’ve underestimated it. And never a year passes but I get some surprise that pushes my limit a little farther.” - Charlie Munger
11. If a person tells you why their thing is great (city, relationship, or job) - take it with a pinch of salt. If they tell you why it’s terrible - take it like a handful of gold. If someone swims upstream against their identity and incentives, it probably holds some deep truth.
12. Skinner’s Law: If procrastinating, there are two ways to solve it.
Option 1 - Make the pain of inaction > Pain of action.
Option 2 - Make the pleasure of action > Pleasure of inaction
13. The person with a gun to their head and crack cocaine at the finish line doesn’t need motivation.
When I think about everything that I've learned from Greenblatt, I'm struck above all by four simple lessons.
First, you don't need the optimal strategy. You need a sensible strategy that's good enough to achieve your financial goals. As the Prussian military strategist General Carl von Clausewitz said, "The greatest enemy of a good plan is the dream of a perfect plan."
Second, your strategy should be so simple and logical that you understand it, believe it to your core, and can stick with it even in the difficult times when it no longer seems to work.The strategy must also suit your tolerance of pain, volatility, and loss. It helps to write down the strategy, the principles on which it stands, and why you expect it to work over time. Think of this as a policy statement or a financial code of conduct. In times of stress and confusion, you can review this document to restore your equilibrium and regain your sense of direction.
Third, you need to ask yourself whether you truly have the skills and temperament to beat the market. Greenblatt possesses an unusual combination of characteristics that give him a significant edge. He has the analytical brilliance to deconstruct a complex game, breaking it down into the most fundamental principles: value a business, buy it at a discount, then wait. He knows how to value businesses. He isn’t influenced by conventional opinion or authority figures such as the Wharton professors who claimed that the market is efficient. On the contrary, he delights in proving them wrong again and again.He's also patient, even-tempered, self-assured, competitive, rational and disciplined.
Fourth, it's important to remember that you can be a rich and successful investor without attempting to beat the market. Over several decades, Jack Bogle watched thousands of active fund managers try and fail to prove their long-term superiority over index funds. "All these stars proved to be comets," he told me. "They light up the firmament for a moment in time. They burn out, and their ashes float gently down to earth. Believe me, it happens all the time." Bogle often argued that “the ultimate in simplicity” is to buy and hold a single balanced index fund that owns a fixed percentage of US and foreign stocks and bonds. And that’s it. No self-destructive attempts to time the market. No fantasies of picking the next hot stock or fund.
William Green - Richer, Wiser, Happier
Nobody buys a farm based on whether they think it’s going to rain next year.
Warren Buffett
No matter how great the talent or efforts, some things just take time.
You can’t produce a baby in one month by getting nine women pregnant.
Warren Buffett
In almost every press interview, I'm asked,"What are your sell criteria?"
I say I have two: the too-early system and the too-late system. And both work with about equal inexactitude.
Ralph Wagner - A Zebra in Lion Country
To be very successful, you've got to think in terms of overall strategies, not individual stocks.
You index to that strategy, so to speak - in other words, you passively implement the strategy. Not over-ride the strategy based on your intuitive insight, but rather use the strategy as it was intended to be used based on all the empirical data that you've collected on it.
People have a hard time committing to a strategy because its in our very nature to apply our intuition.
Don't try to cherry pick stocks. The minute you start cherry picking I can almost guarantee you're going to cherry pick right down to returns that are below the S&P 500. Because if you're going to pick the stocks on an intuitive basis, you're going to pick them for whatever reason makes the most sense at that time. Your returns almost always come from the ones you didn't expect returns to come from.
You also have to have a long-term perspective.
James P. Shaugnessy
Eighty per cent of the mutual funds covered by Morningstar fail to beat the S&P 500 because their managers lack the discipline to stick with one strategy through thick and thin. This lack of discipline devastates long-term performance.
James P. Shaugnessy - What works on Wall Street
I'd say that most of today's brands will still be the brands of the future. We did research on twenty product categories and found that the lead brands back in 1923 are essentially the same lead brands as they are today, with the exception of five. So, in other words, 15 out of 20 are still in number one place.
Al Ries - Co-author of Marketing Warfare
Any damn fool can do a deal, but it takes genius, faith and perseverance to create a brand. Conversely, it takes genius, faith and perseverance for the competition to destroy a brand also.
David Ogilvy
If our company is burned to the ground, we'vd have no trouble borrowing the money to rebuild, based on the strength of our trademarks alone.
Donald Keough - President of Coca-Cola
A winner starts off with more than a quick 20% move within a month.
Buy Filter - On all-time high day:
5 times the daily average volume or
Highest volume in last one year
TopOut:
High Trading volume with hardly any gains.
Brad Koteshwar in The Perfect Stock
• I think you would understand any presentation using the word EBITDA if every time you saw that word, you just substituted the phrase with 'bullshit earnings.'
• I'm optimistic about life. If I can be optimistic when I'm nearly dead, surely the rest of you can handle a little inflation.
• The best way to get what you want in life is to deserve what you want. How could it be otherwise? The world is not crazy enough to look for a lot of undeserving people to reward.
• I've listened to many nonsensical cost-of-capital discussions, but never heard an intelligent one.
• That's how I got married. My wife lowered her expectations.
• Some people are confused. I play golf with a man. He says, 'What good is health? You can't buy money with it!
• It's perfectly obvious, at least to me, that to say that derivative accounting in America is a sewer is an insult to sewage.
• Warren reminds me that once I asked a man who had just left a large investment bank, "How does your firm make its money?" He said, "Off the top, off the bottom, off both sides, and in the middle."
Charlie Munger
“ ”
An empty sack cannot stand upright
Warren Buffett
Bad luck is easy to identify when you fail and good luck is easy to ignore when you succeed.
Morgan Housel
The first stocks to make new 52-week highs after a six-to-twelve-week correction are usually the ones that will outperform significantly over the next two to six months.
from The Next Apple- How to own the Best Performing Stocks in any given year
One mistake that investors should avoid in my opinion is going down the quality curve in search of cheaper valuations. This is a mistake that all of us make in time of high valuations -buy the cheaper and weaker business. This normally does not end well and the investor is left with positions they have limited conviction in and which are cheap for a reason.
Akash Prakash
In his recent Berkshire Hathaway 2022 Annual Letter, Warren Buffett provided a list of some of the best thoughts from his partner Charlie Munger. Here’s an excerpt from the letter:
Charlie and I think pretty much alike. But what it takes me a page to explain, he sums up in a sentence. His version, moreover, is always more clearly reasoned and also more artfully – some might add bluntly – stated.
Here are a few of his thoughts, many lifted from a very recent podcast:
• The world is full of foolish gamblers, and they will not do as well as the patient investor.
• If you don’t see the world the way it is, it’s like judging something through a distorted lens.
• All I want to know is where I’m going to die, so I’ll never go there.
And a related thought: Early on, write your desired obituary – and then behave accordingly.
• If you don’t care whether you are rational or not, you won’t work on it. Then you will stay irrational and get lousy results.
• Patience can be learned. Having a long attention span and the ability to concentrate on one thing for a long time is a huge advantage.
• You can learn a lot from dead people. Read of the deceased you admire and detest.
• Don’t bail away in a sinking boat if you can swim to one that is seaworthy.
• A great company keeps working after you are not; a mediocre company won’t do that.
• Warren and I don’t focus on the froth of the market. We seek out good long-term investments and stubbornly hold them for a long time.
• Ben Graham said, “Day to day, the stock market is a voting machine; in the long term it’s a weighing machine.” If you keep making something more valuable, then some wise person is going to notice it and start buying.
• There is no such thing as a 100% sure thing when investing. Thus, the use of leverage is dangerous. A string of wonderful numbers times zero will always equal zero. Don’t count on getting rich twice.
• You don’t, however, need to own a lot of things in order to get rich.
• You have to keep learning if you want to become a great investor. When the world changes, you must change.
Warren and I hated railroad stocks for decades, but the world changed and finally the country had four huge railroads of vital importance to the American economy. We were slow to recognize the change, but better late than never.
Finally, I will add two short sentences by Charlie that have been his decision-clinchers for decades: “Warren, think more about it. You’re smart and I’m right.”
And so it goes. I never have a phone call with Charlie without learning something. And, while he makes me think, he also makes me laugh.
I will add to Charlie’s list a rule of my own: Find a very smart high-grade partner – preferably slightly older than you – and then listen very carefully to what he says.
Men, it has been well said, think in herds. It will be seen that they go mad in herds, while they only recover their senses slowly, and one by one.
Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds
A lone amateur built the ark; a large group of professionals built the Titanic.
Unknown, The Maxims of Wall Street
Fear incites human action far more urgently than does the impressive weight of historical evidence.
Jeremy Siegel, Stocks for the Long Run (3rd Edition)
When it’s dark enough, you can see the stars.
Old Persian Proverb
Nothing like price to change sentiment.
Helene Meisler (@hmeisler)
If you’re not willing to react with equanimity to a market price decline of 50% two or three times a century, you’re not fit to be a common shareholder and you deserve the mediocre result you’re going to get.
Charlie Munger, Interview with BBC
Your personal experiences with money make up maybe 0.00000001% of what’s happened in the world, but maybe 80% of how you think the world works.
Morgan Housel, The Psychology of Money
The four most dangerous words in investing are: ‘This time it’s different.'
Sir John Templeton, The Devil’s Financial Dictionary
The game of professional investment is intolerably boring and overreacting to anyone who is entirely exempt from the gambling instinct; whilst he who has it must pay to this propensity the appropriate toll.
John Maynard Keynes, The General Theory of Employment, Interest, and Money
Wall Street sells stocks and bonds, but what it really peddles is hope.
Jason Zweig, The Devil’s Financial Dictionary
Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.
Paul Samuelson
I can calculate the motions of the heavenly bodies, but not the madness of people.
Isaac Newton, The Royal Society
The investor’s chief problem — and even his worst enemy — is likely to be himself.
Benjamin Graham, The Intelligent Investor
Wealth isn’t primarily determined by investment performance, but by investor behavior.
Nick Murray, Simple Wealth Inevitable Wealth
The greatest lesson in life is to know that even fools are right sometimes.
Winston Churchill
A bull market is like sex. It feels best just before it ends.
Barton Biggs, Berkshire Hathaway 2013 Letter to Shareholders
It’s difficult to make predictions, especially with regards to the future.
Old Proverb, The Most Important Thing
To err is human, but to get paid for it is divine.
Howard Ruff, The Maxims of Wall Street
We are fond of saying that if these strategies are truly horribly overcrowded then someone has apparently forgotten to tell the prices.
Clifford Asness, We’re Not Dead Yet
The first rule of investment is: Don’t Lose. And the second rule of investment is: Don’t forget the first rule.
Warren Buffett, How to Pick Stocks & Get Rich, PBS (1985)
I put two children through Harvard by trading options. Unfortunately, they were my broker’s children.
Jason Zweig, The Devil’s Financial Dictionary
If you want to be a millionaire, start with a billion dollars and launch a new airline.
Richard Branson, Harvard Business Review
If it flies, floats, or fornicates, always rent it—it’s cheaper in the long run.
Felix Dennis, How to Get Rich
There seems to be an unwritten rule on Wall Street: If you don’t understand it, then put your life savings into it.
Peter Lynch, One Up on Wall Street
If you owe the bank $100, that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.
Old Proverb, Quote Investigator
I tell my father’s story of the gambler who lost regularly. One day he hears about a race with only one horse in it, so he bet the rent money. Halfway around the track, the horse jumped over the fence and ran away.”
Howard Marks, The Most Important Thing
Risk and time are opposite sides of the same coin, for if there were no tomorrow there would be no risk. Time transforms risk, and the nature of risk is shaped by the time horizon: the future is the playing field.
Peter L. Bernstein, Against the Gods
Risk taking is necessary for large success—but it is also necessary for failure.
Nassim Taleb, Fooled by Randomness
I am more concerned about the return of my principal than the return on my principal.
Will Rogers
When you want to test the depths of the stream, don’t use both feet.
Chinese Proverb
Large price changes tend to be followed by more large changes, positive or negative. Small changes tend to be followed by more small changes. Volatility clusters.
Benoit B. Mandlebrot, The Misbehavior of Markets
Markets look a lot less efficient from the banks of the Hudson than from the banks of the Charles.
Fischer Black, Against the Gods
Liquidity is only there when you don’t need it.
Old Proverb, The Devil’s Financial Dictionary
Risk cannot be eliminated; it just gets transferred and spread.
Howard Marks, The Most Important Thing
There is no such thing as no risk. There’s only this choice of what to risk, and when to risk it.
Nick Murray, Simple Wealth Inevitable Wealth
Survival is the only road to riches. You should try to maximize return only if losses would not threaten your survival and if you have a compelling future need for the extra gains you might earn.
Peter L. Bernstein, Interview with Jason Zweig (2004)
The market can remain irrational longer than you can remain solvent.
A. Gary Shilling/Unknown, Quote Investigator
When I see a good thing going cheap, I buy a lot of it.
Hetty Green, The Maxims of Wall Street
Successful investing is anticipating the anticipation of others.
John Maynard Keynes, The Maxims of Wall Street
In this business, if you are good, you’re right six times out of ten.
Peter Lynch
Trading stocks is simple mathematics—2+2 = 4, but our greed makes it 5 and our panic makes it 3.
Feroz Ahmed Khan
Remember that stocks are never too high for you to begin buying or too low to begin selling.
Jesse Livermore, Reminiscences of a Stock Market Operator
The most dangerous people in the world are very smart traders who have never gotten their teeth kicked in.
F. Helmut Weymar, More Money Than God
It was never my thinking that made the big money for me. It was my sitting.
Edwin Lefevre, Reminiscences of a Stock Market Operator
We are all at a wonderful ball where the champagne sparkles in every glass and soft laughter falls upon the summer air. We know, by the rules, that at some moment, the Black Horseman will come shattering through the great terrace doors, wreaking vengeance and scattering the survivors.
Those who leave early are saved, but the ball is so splendid no one wants to leave while there is still time, so that everyone keeps asking, ‘What time is it? What time is it?’ But none of the clocks have any hands.
Adam Smith (pseudonym for George Goodman), Supermoney
The trend has vanished, killed by its very discovery.
Benoit B. Mandlebrot, The Misbehavior of Markets
More people lost money waiting for corrections and anticipating corrections than the actual corrections.
Peter Lynch, Interview with Fidelity (2019)
When the Rothschilds got the word about the battle of Waterloo—in the movie it was by carrier pigeon—they didn’t rush down and buy British consols, the government bonds. They rushed in and sold, and then, in the panic, they bought.
Adam Smith (pseudonym for George Goodman), The Money Game
The time to buy is when there’s blood in the streets.
Baron Rothschild
It is my conclusion that the successful investor must [have] … patience to wait for the right moment—courage to buy or sell when the time arrives—and liquid capital.
Benjamin Roth, The Great Depression: A Diary
What the wise man does in the beginning, the fool does in the end.
Old Proverb, Berkshire Hathaway 2011 Letter to Shareholders
The additional rise of this stock above the true capital will be only imaginary; one added to one, by any rules of vulgar arithmetic, will never make three and a half; consequently, all the fictitious value must be a loss to some persons or other, first or last. The only way to prevent it oneself must be to sell out betimes, and so let the Devil take the hindmost.
Anonymous Pamphleteer, Devil Take the Hindmost
The irony is that this is a money game and money is the way we keep score. But the real object of the Game is not money, but it is the playing of the Game itself. For the true players, you could take all the trophies away and substitute plastic beads or whale’s teeth; as long as there is a way to keep score, they will play.
Adam Smith (pseudonym for George Goodman), The Money Game
In bear markets, stocks return to their rightful owners.
Old Proverb
When the facts change, I change my mind. What do you do sir?
John Maynard Keynes
I hate to be wrong. But I hate more to stay wrong.
Paul A. Samuelson
A mariner does not become skilled by always sailing on a calm sea.
Heber J. Grant
Buying at the bottom and selling at the top are typically done by liars.
Bernard Baruch
I have known a lot of investors who came to the market to make money, and they told themselves that what they wanted was the money: security, a trip around the world, a new sloop, a country estate, an art collection, a Caribbean house for cold winters. And they succeeded. So they sat on the dock of the Caribbean home, chatting with their art dealers and gazing fondly at the new sloop, and after a while it was a bit flat. Something was missing.
Adam Smith (pseudonym for George Goodman), The Money Game
The market’s not a very accommodating machine; it won’t provide high returns just because you need them.
Peter L. Bernstein, The Most Important Thing
Spending money to show people how much money you have is the fastest way to have less money.
Morgan Housel, The Psychology of Money
Two of the hardest things to do are save when you’re young and spend when you’re old.
Unknown, The Maxims of Wall Street
Still, let me repeat it one more time. Becoming rich does not guarantee happiness. In fact, it is almost certain to impose the opposite condition—if not from the stresses and strains of protecting wealth, then from the guilt that inevitably accompanies its arrival.
Felix Dennis, How to Get Rich
Two essentials for successful retirement are sufficient funds to live on and sufficient things to live for.
Ernie Zelinski, How to Retire Happy, Wild, and Free
Money, contrary to popular myth, does help people more than it spoils them, simply because it opens up more options. The danger is that when you have your million, you then want two, because you have a button saying I Am a Millionaire and that is who you are, and there are, all of a sudden—as you will notice—so many people with buttons saying I Am a Double Millionaire.
Adam Smith (pseudonym for George Goodman), The Money Game
Another lesson I learned early is that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.
Jesse Livermore, Reminiscences of a Stock Market Operator
Fund performance comes and goes. Costs go on forever.
John “Jack” Bogle, The Little Book of Common Sense Investing
If you want to be wealthy, live below your means.
Paul Merriman, The Maxims of Wall Street
History may not repeat itself, but it rhymes.
Mark Twain, The Maxims of Wall Street
Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.
John Templeton, The Maxims of Wall Street
Stay humble or the market will do it for you.
Anonymous
Price is my due diligence.
Warren Buffett, Dinner with Brent Beshore
Don’t struggle to find the needle in the haystack; just buy the haystack.
John “Jack” Bogle
I suppose the stock market is like this: Here I have a dish of ice cream that costs me ten cents. Robert, the waiter, comes in and says the ice cream is all gone and no more is to be had tonight.
My ice cream suddenly seems more valuable to you and you offer me, say, twelve cents for it. Then Bill, who had intended to order ice cream makes you an offer of thirteen cents. You, being Scotch, can’t resist taking a profit. Bill brags so much about the ice cream that I decide I was foolish to let it go in the first place and buy it back for fourteen cents.
About that time I discover, to my dismay, that the ice cream has melted.
Fred C. Kelly, Why You Win or Lose
The man who is a bear on the United States will eventually go broke.
J. P. Morgan, The Maxims of Wall Street
Nobody knows nothing.
John “Jack” Bogle (via his mentor), Interview with Sensible Investing
The price of education is paid once. The price of ignorance is paid forever.
–Ted Nicholas, The Maxims of Wall Street
The compounding of wealth, like the building of the City, is part of the much older game of life against death. The immortality is spurious because that particular wheel is fixed; you do have to lose in the end. That is the way the senior game is set up: You can’t take it with you.
Adam Smith (pseudonym for George Goodman), The Money Game
When the incentives were so huge and you had so many funds competing to the death—all of them with the same Wharton trained wizards on the staff, the same state of the art technology systems, the same expert network consults, the same greed and determination, how else could you rise above everyone else and beat the market year after year?
Sheelah Kolhatkar, Black Edge
Price is what you pay. Value is what you get.
Benjamin Graham, Berkshire Hathaway 2008 Letter to Shareholders
The stock market is filled with individuals who know the price of everything, but the value of nothing.
Philip Fisher
Finance posits a linear conception of time. A day is a day is a day. One five-year period is precisely the same duration as another five-year period. Episodes of time are uniform and we experience them unidirectionally, from present to future.
Psychology disagrees: The human experience with time is non-linear and lumpy. The duration of those seconds and decades expand and contract. Time is elastic. It slows down during traumatic accidents and speeds up as we grow older. There’s an old line in the world of parenting that
“the days are long but the years are short.”
That’s mind time at play and mind time is what matters in the pursuit of wealth and funded contentment.
Brian Portnoy, The Geometry of Wealth
Investment is the discipline of relative selection.
Sid Cottle, The Most Important Thing
Perhaps brains or a skill are the most portable and best wealth preserver.
Barton Biggs, Wealth, War, and Wisdom
Diagnosing Tickeritis (1904) An incredible excerpt from a 1904 edition of The Medical Times,
describes a dangerous affliction impacting market speculators. "Tickeritis."
"A bull at the wrong time and a bear at the wrong time, and a jackass all the time."
We don’t have to be smarter than the rest. We have to be more disciplined than the rest.
Warren Buffett
Do not take yearly results too seriously. Instead, focus on four or five-year averages.
Warren Buffett
• Bubbles do not arise out of thin air. They have a solid basis in reality but misconception distorts reality. For a while, reality reinforces the misconception, but eventually the gap between reality and its false interpretation becomes unsustainable. During the self-reinforcing phase, the misconception may be tested and when a test is successful the misconception is reinforced. This widens the gap, leading to an eventual reversal. The later it comes, the more devastating the consequences.
• In a boom-bust process, passing an early test tends to reinforce the misconception which gave rise to it.
• To create a bubble, the prevailing bias must be first self-reinforcing until it becomes unsustainable and turns self-reinforcing in the opposite direction (and thus self-defeating).
• Analysing what went wrong in the '90s, we can identify two specific elements: a decline in professional standards and a dramatic rise in conflicts of interest. And both are really symptoms of the same broader problem: the glorification of financial gain irrespective of how it is achieved.
• When broad principles are minutely codified, the rules paradoxically become easier to evade.
• Left to their own devices, financial markets are liable to go to socially disruptive extremes.
• The more susceptible the participants' values are to market developments, the more unstable the system becomes.
• It does not follow from the fact that regulations are imperfect that unregulated markets are perfect.
• In developing a new regulatory framework we must remember that regulations are liable to be even more imperfect than markets. They need a feedback mechanism that allows mistakes to be corrected. That is what makes regulated markets superior to central planning. In the absence of feedback either from markets or from free speech and free elections, there is no limit to how far governments can go wrong. But democracy can keep the excesses of government within bounds, just as government can contain excesses of the financial markets.
George Soros
Don’t worry about looking good - worry instead about achieving your goals.
Ray Dalio
The ideal would be to make money with your mind, not with your time."
Charlie Munger
You are lucky in life if you have the right heroes. I advise all of you, to the extent that you can, to pick out a few good heroes."
Warren Buffett
Dream big and be prepared mentally and financially to act fast when opportunities present themselves. Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold."
Warren Buffett
To master investing you need to master your emotions.
Peter Lynch
Don't look for the money ~ look for something you love, and if you're good, the money will come.
Warren Buffett
It’s better to hang out with people better than you. Pick out associates whose behavior is better than yours and you’ll drift in that direction."
Warren Buffett
To get what you want, you have to deserve what you want.
Charlie Munger
Wonderful companies become risky investments when people overpay for them.
Peter Lynch
I don't believe in predicting markets, I believe in buying great companies. Especially companies that are undervalued and/or underappreciated.
Peter Lynch
No matter how great the talent or efforts, some things just take time.
Warren Buffett
In my whole life, I’ve never succeeded much in what I wasn’t interested in. So I don’t think you're going to succeed if what you’re doing all day doesn’t interest you.
Charlie Munger
"How did you go bankrupt?" Bill asked.
"Two ways." Mike said. "Gradually and then suddenly."
Ernest Hemingway - The Sun also rises
Experts often possess more data than judgement.
Colin Powell
We now live in an age when doctors destroy health, lawyers destroy justice, universities destroy knowledge, governments destroy freedom, the press destroys information, religion destroys morals, and banks destroy the economy.
Chris Hedges
There's a model that I call 'surfing' -- when a surfer gets up and catches the wave and just stays there, he can go a long, long time. But if he gets off the wave, he becomes mired in shallows...But people get long runs when they're right on the edge of the wave -- whether it's Microsoft or Intel or all kinds of people, including National Cash Register in the early days.
Charlie Munger
It’s good to have people in your life who you don’t want to disappoint.
Warren Buffett
A society can get a lot wrong as long as it gets the big things right.
David Brooks
Learn enough from history to respect one another’s delusions.
Will Durant
Strategic Mediocrity
Never being #1 in a given year but staying around long enough to come out on top.
When I see a bubble forming I rush in to buy, adding fuel to the fire.
That is not irrational.
George Soros
A fish rots from the head down.
French saying
Every Government has a right to levy taxes. But no Government has the right, in the process of extracting tax, to cause misery and harassment to the taxpayer and the gnawing feeling that
he is made the victim of palpable injustice.
Nani Palkhiwala
“ ”
Get rid of the fear of making a loss;
Take large profits when you get them.
For Short-term trading
Businesses generally have the right to decide whom they want to do business with, as long as they are not discriminating by ethnicity, sex, religion, disability or another protected class.
When what you hear and what you see don't match, trust your eyes.
Dale Renton
The leader in a democracy has to keep the people entertained.
George Marshall - US Army Chief of Staff
The dead outnumber the living 14 to 1, and we ignore the accumulated experience of such a huge majority of mankind at our peril.
Niall Ferguson - Historian
If people never did silly things nothing intelligent would ever get done.
Ludwig Wittgenstein - Philosopher (1889 - 1951)
I have developed a theory about boom-bust processes, or bubbles, along these lines.
Every bubble has two components: an underlying trend that prevails in reality and a misconception relating to that trend. A boom-bust process is set in motion when a trend and a misconception positively reinforce each other.
The process is liable to be tested by negative feedback along the way. If the trend is strong enough to survive the test, both the trend and the misconception will be further reinforced.
Eventually, market expectations become so far removed from reality that people are forced to recognize that a misconception is involved. A twilight period ensues during which doubts grow, and more people lose faith, but the prevailing trend is sustained by inertia. As Chuck Prince, former head of Citigroup said: we must continue dancing until the music stops.
Eventually a point is reached when the trend is reversed; it then becomes self reinforcing in the opposite direction.
George Soros
Any time anybody offers you anything with a big commission and a 200-page prospectus, don't buy it.
Munger's Rule
Once you let wrongdoers get rich, they get enormous political power to prevent change in the laws that are enriching them. It means that we should all be more vigilant about stepping on these wrongs when they’re small. Once they get large, they’re very hard to stop.
Charlie Munger You don’t want to be like the motion picture executive in California. They said the funeral was so large because everybody wanted to make sure he was dead.
Charlie Munger
Remember that the person most likely to defraud you will be saying your magic words, whatever they are. It can be difficult to imagine that some people believe in nothing. That those words, to which you attribute great meaning, can mean nothing to them. But a big part of investing is to study people and to see them clearly. Even if it’s unpleasant or contrarian. Especially when it’s unpleasant or contrarian.
Charlie Munger
No group is more dangerous than the disgruntled literate.
Theodore Dalrymple
One of the most reliable predictors of state collapse and high political instability is elite overproduction.
Peter Turchin
Spend each day trying to be a little wiser than you were when you woke up. Day by day, and at the end of the day - if you live long enough - like most people, you will get out of life what you deserve.
Charlie Munger
There is no better teacher than history in determining the future. There are answers worth billions of dollars in $30 history books.
Charlie Munger
What is the secret of success? - One word answer: rational.
Charlie Munger
It takes character to sit with all that cash and to do nothing. I didn’t get to where I am by going after mediocre opportunities.
Charlie Munger
It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.
Charlie Munger
Too many people spend money they earned to buy things they don't want to impress people they don't like.
Will Rogers
I don’t want to spend my time trying to earn a lot of little profits. I want very, very big profits that I’m ready to wait for.
Philip Fisher
I made as deep a study as I could of what happened after World War I in France, where there was lots of inflation, and in Germany, where there was inflation into infinity. And in both countries the same thing happened. If you bought the very best stocks, according to my definition–not just any stocks–you were still darned uncomfortable during that period of the spiraling inflation. But when the inflation was over, you came out of it with about 80% of the real purchasing power intact.
Philip Fisher
When I have to argue strongly with [clients] to like something, and they say, “Well, all right, if you say so, we’ll do it.’ I’m much more apt to be right than when, as sometimes happens, I say, “Let’s buy 10,000 shares,’ and they say, “Why don’t we buy 50,000?’ That’s usually a warning signal that it’s too late to buy. Nor will I buy market-favored stocks. I particularly notice it when I attend meetings for technology stocks and see all the people crowding into the room and so on. If there’s standing room only, that’s usually a pretty fair sign it’s not a good time to buy the stock.
Philip Fisher
The only way that I’ve suggested is get them to give you a transcript of what they actually have done. And if they take losses, and small losses, quickly and let their profits run, give them a gold star. If they take their profits quickly and let their losses run, don’t go near them.
Philip Fisher's Advice on Choosing a Fund Manager
Every economic recovery since World War II has been preceded by a stock-market rally.
And these rallies often start when conditions are grim.
Peter Lynch
A study from Fidelity found that the best-performing accounts were of investors who were dead.
(From 2003-2013)
Fidelity Investments, the mutual fund behemoth with trillions in assets under management, performed a study to determine which of their accounts had done the best. They were trying to determine the traits or attributes of their investors that led to the best performance. The study's conclusions were very interesting. What they found was that the investor accounts that were completely forgotten about by their account holders ended up with the best performance. They didn't tinker with them. They didn't trade in and out of them. They simply forgot they existed so they didn't make any changes in their portfolios.
The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor.
Jesse Livermore
“ ”
The greatest enemy of a good plan is the dream of a perfect plan.
General Carl von Clausewitz
Money speaks only one language.
If you save me today, I will save you tomorrow.
Central banks have gotten out of the central banking business and into the central planning business, meaning that they are devoted to raising up - if they can - economic growth and employment through the dubious means of suppressing interest rates and printing money.
James Grant
The physics of collisions... the second one does the harm. When your car hits a telephone pole, no problem. Then after a slight lag, trouble comes when you hit the inside of your car. Same thing in football: helmet on helmet is all-okay... until your brain hits the inside of your skull.
“ ”
An idiot with a plan can beat a genius without a plan.
Warren Buffett
The stocks that hold up the best and rally into the new high ground off the market low during the first 4 to 8 weeks of a new bull market are the new market leaders, capable of advancing significantly.
Mark Minervini
The U.S. stock market typically declines by at least:
10% every other year
30% every 4-5 years
50%+ once a generation
One day, in a moment of frightening enlightenment, I knew that I really did not know exactly how and why I had made all the money that I had over the prior 17 years. This threw my confidence for a jolt.
Paul Tudor Jones - Billionaire hedge-fund manager
One of my guiding principles is don’t do anything that other people are doing. Always do something a little different if you can. The concept is that if you do it a little differently there is a greater potential for reward than if you do the same thing that other people are doing. I think that this kind of goal for one’s work, having obviously the maximum risk, would have the maximum reward no matter what the field may be.
Seymour Cray
Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.
Peter Lynch
Bottom fishing is a popular investor pastime, but its usually the fisherman who gets hooked. Trying to catch the bottom on a falling stock is like trying to catch a falling knife. Its normally a good idea to wait until the knife hits the ground and sticks, then vibrates for a while and settles down before you try to grab it.
Peter Lynch
For investors as a whole, returns decrease as motion increases.
Warren Buffett's Fourth Law of Motion
Howard Marks once talked about an investor whose annual results were never ranked in the top quartile, but over a 14-year period he was in the top 4% of all investors. If he keeps those mediocre returns up for another 10 years he may be in the top 1% of his peers – one of the greatest of his generation despite being unmentionable in any given year.
So much focus in investing is on what people can do right now, this year, maybe next year. “What are the best returns I can earn?” seems like such an intuitive question to ask.
But like evolution, that’s not where the magic happens.
If you understand the math behind compounding you realize the most important question is not “How can I earn the highest returns?” It’s, “What are the best returns I can sustain for the longest period of time?”
That’s the big lesson from compounding: Less focus on change, more focus on the exponent.
In investing, the willingness to admit you have no competitive advantage can be the ultimate competitive advantage.
Strong self-awareness breeds high-quality decision-making. Foolish self-confidence breeds nothing of use.
Be self-aware - act accordingly.
Tony Robbins
Do you want to know why most people lose money in stocks?
Listen to the chatter in any broker's office.
Do not expect your ship to come in unless you have sent one out.
It is better to lose the saddle than the horse.
To invest successfully, you need not understand beta, efficient markets,
modern portfolio theory, option pricing, or emerging markets. You may, in
fact, be better off knowing nothing of these. That, of course, is not the prevailing
view at most business schools, whose finance curriculum tends to be
dominated by such subjects. In our view, though, investment students need
only two well-taught courses—How to Value a Business, and How to Think
About Market Prices.
Warren Buffett
A pin lies in wait for every bubble. And when the two eventually meet, a new wave of investors learn some very old lessons.
Warren Buffett
Inflation redistributes from creditors to debtors - not exactly a burden on the bottom half of the income distribution.
The great disinflation of the 1970s was associated with soaring, not falling, inequality - mostly not casual, but hardly supportive of the claim.
"Inflation especially hurts the poor" has truthiness - it sounds like it should be true. But I don't see either evidence or a mechanism.
Paul Krugman
Find companies whose free cash flow yield can beat the market’s hurdle of 6%-8% and hold on as long as you’re right.
Bill Miller
Well there was, obviously, a lot of fraud. There was fraud on the parts of the borrowers and there was fraud on the part of the intermediaries, in some cases. But you'd better not have a system that is dependent on the absence of fraud. It will be with us.
Warren Buffett What's the most important thing in investing? IMHO, compounding. And what's the next important rule of compounding - to not disturb it. Which would mean: no rebalancing, no trimming, no in and out. What else could it mean?
Morgan Housel
“ ”
Don't confuse brains with a bull market
Broadly, there are five sources of real estate value creation. One, the legal `state change' from agricultural or unused land to residential or commercial. Two, the creation of a physical environment which makes the real estate usable. This consists of construction and infrastructure. Three, the improvement in actual livability as an area becomes fully populated and eventually comes into the mainstream. Four, inflation and general economic growth over a period of time. Five, the periodic booms and manias and slumps that inflict real estate.
The economists tried to figure out why the elite investors are good at buying stocks yet bad at selling stocks.
When investors buy stocks, they have something to look at to see how they're doing. They can learn from past mistakes in buying stinkers and adjust accordingly. But when they sell a stock, poof it's gone. They're not looking at the alternate universe where they held onto the stock and made gobs more money. They're not learning from their past selling mistakes.
"The key reason for our exit from Sterling Tools is deterioration in its accounting score under the Marcellus’ proprietary forensic accounting model, triggered by below-par scores on the following ratios: (i) growth in auditor’s remuneration relative to revenues; (ii) contingent liabilities as a percentage of net worth; (iii) miscellaneous expenses as a percentage of total revenues; and (iv) yield on cash and cash equivalents," Marcellus said.
The solution to 90% of financial problems is “save more money and be more patient.”
Nothing is more powerful or more capable of moving the needle.
Research by Hendrik Bessembinder, a professor at Arizona State University, has found that nearly 60 per cent of global stocks over the past 28 years did not outperform one month treasury bills. That might seem a case for not investing in equities at all.
But the reason equity investing as a whole is thankfully still worthwhile is due to a small number of superstar companies. Bessembinder calculates that about 1 per cent of companies accounted for all of the global net wealth creation. The other 99 per cent of companies were a distraction to the task of making money.
“ ”
In many ways, the stock market is like the weather.
If you don't like the current conditions all you have to do is wait for a while.
The investor's chief problem - and his worst enemy - is likely to be himself. In the end, how your investments behave is much less important than how you behave.
Limit your size in any position so that fear does not become the prevailing instinct guiding your judgement.
The most naive forecast is to assume that nothing changes, but nothing could be more dangerous to your wealth.
“ ”
Selling your winners and holding your losers is like cutting the flowers and watering the weeds.
Peter Lynch
In the long run, it's not just how much money you make that will determine your future prosperity. It's how much of that money you put to work by saving it and investing it.
Peter Lynch
Going for market share at the peak of our economic cycle is the great humbler. Not just General Motors but even Wal-Mart and Motorola have paid their dues in previous cycles - not to mention PepsiCo, P&G and Citicorp.
It has been helpful to me to have tens of thousands (students) turned out of business schools taught that it didn't do any good to think.
Warren Buffett on The Random Walk Theory
Boldness in business is the first, second and third thing.
Thomas Fuller
“ ”
Don't let the market's day-to-day ups and downs distract you from what you want to accomplish over the years.
Charles Schwab
He attributed his success in stocks to recognising that the critical issue was not the business or economic cycle, but the psychological cycle.
On John Maynard Keynes
Economics is a subject that does not greatly respect one's wishes.
Nikita Khrushchev
“ ”
A horse that can count to ten is a remarkable horse - not a remarkable mathematician.
Samuel Johnson
A good manager is unlikely to overcome a bad business.
Warren Buffett
Turnarounds seldom turn.
Warren Buffett
One question Buffett always asked himself in appraising a business is how comfortable he would feel having to compete against it, assuming that he had ample capital, personnel, experience in the same industry and so forth.
The principal judgements in business are those concerning character.
J. P. Morgan Sr.
Selling a good stock is like marrying for money - a mistake in most cases, insanity if one is already rich.
Warren Buffett
Its a very sad thing. You can have somebody whose aggregate performance is terrific, but if they have a weakness, maybe its with alcohol, maybe it's susceptibility to taking a little easy money, its the weak link that snaps you. And frequently, in the financial markets, the weak link is borrowed money.
Warren Buffett
Mrs. B's sort of work was more useful to Society that what went on at Merrill Lynch - creating pies is more useful that slicing pies.
Warren Buffett
Buffet, who is normally self-effacing and steers to an unflambouyant, low key style most of the time, describes his principles as "simple, old and few."
"If principles are dated, they are not principles." he told the annual meeting in 1988.
Traditional wisdom may be long on tradition and short on wisdom.
Warren Buffett
The secret of making money, in his view, is not to take on risks, but to avoid them.
We've done better by avoiding dragons rather than by slaying them.
Warren Buffett
“ ”
Our favourite holding period is forever.
Warren Buffett
“ ”
If you're smart, you don't need debt.
If you're dumb, its poisonous.
Warren Buffett
Greed on wall street exceeded its intellect.
Michael Yanney
No boy will ever succeed as a man who does not in his youth begin to save.
Theodore Roosevelt
A valuable consumer franchise exists when people prefer a certain name so much they would pay extra for it, or walk an extra block or even across town because they have to have it.
Warren Buffett
Buffett told Carol Loomis that all the Harward representative saw was "a scrawny nineteen-year-old who looked sixteen and had the social poise of a twelve year old." When the interview was over, so were Buffett's prospects at Harvard.
A great investment opportunity occurs when a marvelous business encounters a one-time huge, but solvable problem.
Warren Buffett
Democracy is great but not in investment decisions.
Warren Buffett
A hyperactive stock market is the pickpocket of enterprise.
Warren Buffett
Buffett teaches that the true investor waits as long as it takes for the misappraised stock price, the one that offers great value, then when its two inches above the navel, "you swing for the fences."
Buffett's style is to tackle problems his intellectual brilliance can solve, but to steer clear of problems it cannot. He has often said he is trying to step over one-foot obstacles, not jump over seven-footers.
Anything can happen in stock markets and you ought to conduct your affairs so that if the most extraordinary events happen, that you're still around to play the next day.
“ ”
A fool and his money are soon invited everywhere.
Warren Buffett
“ ”
It's a lot easier to stay out of trouble now, than to get out of trouble later.
Warren Buffett
Buffett has said his first mistake was buying Berkshire at all. Even though he recognised it as an unpromising business, he bought it because the price looked cheap.
Buffett told Forbes magazine a key reason for his purchase of Coke was that its stock price did not reflect its all-but-guaranteed growth in international sales in a world that is increasingly uniform in its tastes.
Let's say that you were going away for ten years and you wanted to make one investment and you know everything you know now, and you couldn't change it while you're gone. What would you think about? If I came up with anything in terms of certainty, where I knew the market was going to continue to grow, where I knew the leader was going to continue to be the leader - I mean worldwide - and where I knew there would be big unit growth, I just don't know anything like Coke.
I'd be relatively sure that when I came back they'd be doing a hell of a lot more business than they are doing now.
Warren Buffett
Enjoy your work and work for whom you admire.
Warren Buffett
Long-term, a tough market helps a low-cost operator, which is what we are and intend to remain.
Warren Buffett
If a CEO is enthused about a particularly foolish acquisition, both his internal staff and his outside advisors will come up with whatever projections are needed to justify his stance. Only in fairy tales are emperors told that they are naked.
Warren Buffett
We like to buy businesses, but we don't like to sell them.
Warren Buffett
“ ”
Someone's sitting in the shade today because someone planted a tree a long time ago.
Warren Buffett
We don't budget at the News. We maintain a living, everyday awareness of expenses, and thereby we save an enormous amount of time and expense that goes into budgeting.
Stan Lipsey
There are 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.
Warren Buffett
We believe that according the name 'investor' to institutions that trade actively is like calling someone who repeatedly engages in a one-night stand a romantic.
Warren Buffett
The best business is where no one else competes, where you buy for one cent and sell for a dollar and its habit forming and no one else has it. That's the best business.
Warren Buffett
Look at stocks as businesses, look for businesses you understand run by people you trust and are comfortable with and leave them alone for a long time.
Warren Buffett
Civilisation needs more program trading like it needs more AIDS.
Charlie Munger
You shouldn't own common stocks if a 50 per cent decrease in their value in a short period of time would cause you acute distress.
Warren Buffett
Buffett has frequently expressed his opinion of those he calls "elephant bumpers" - bosses blinded by the limelight. "If they're bumping into elephants at industry meetings, they think they are elephants too."
The best CEOs love operating their companies and don't prefer going to Business Roundtable meetings or playing golf at Augusta National.
Warren Buffett
“ ”
Neither a short-term borrower nor a long-term lender be.
Warren Buffett
“ ”
I'd rather be vaguely right than precisely wrong.
John Maynard Keynes
With few exceptions when a manager with a reputation for brilliance tackles a business with a reputation for poor economics, it is the reputation of the business which remains intact.
Warren Buffett
“ ”
The first chance you have to avoid a loss from a foolish loan is by refusing to make it.
There is no second chance
Warren Buffett
My idea of a group decision is to look in the mirror.
Warren Buffett
“ ”
Coca-Cola does not win the taste test. Microsoft is not the best operating system. Brands win.
AOL's Bob Pittman
Forecasting on the basis of trends is based on the premise that "the future is not going to be significantly different from the past."
Earnings per share will rise constantly on a dormant savings account or on a US Savings Bond bearing a fixed rate of return simply because "earnings" (the stated interest rate) are continuously plowed back and added to the capital base. Thus, even a "stopped clock" can look like a growth stock if the dividend payout ratio is low.
Warren Buffett
You do not adequately protect yourself by being half-awake when others are sleeping.
Warren Buffett
Time is the friend of the great business enterprise and a curse to the mediocre.
Warren Buffett
Fools and greed usually go hand in hand, which creates a field of opportunity for the rational man.
I don't measure my life by the money I've made. Other people might, but I certainly don't.
Warren Buffett
To swim a fast 100 meters, its better to swim with the tide than to work on your stroke.
Warren Buffett
Money, to some extent, sometimes lets you be in more interesting environments. But it can't change how many people love you or how healthy you are.
Warren Buffett
It takes 20 years to build a reputation and five minutes to ruin it.
If you think about that, you'll do things differently.
Warren Buffett
Never lie under any circumstances. Don't pay any attention to the lawyers. If you start lawyers get into the picture, they'll basically tell you "don't say anything." You'll never get tangled up if you just basically lay it out as you see it.
Warren Buffett
Chains of habit are too light to be felt until they are too heavy to be broken.
Warren Buffett
Enact a constitutional amendment stipulating that every sitting representative and senator becomes ineligible for election if in any year of his term our budget deficit runs over 3 per cent of GDP. Were this amendment passed, the interests of the nation and the personal interests of our legislators would instantly merge.
Warren Buffett
It is not debt per se that overwhelms an individual, corporation or country. Rather, it is a continuous increase in debt in relation to income that causes trouble.
Warren Buffett
A mine is a hole in the ground owned by a liar.
Mark Twain
He really has done it honestly and quietly and with a lot of respect for other people.
On Warren Buffett
If you let yourself be undisciplined on the small things, you'd probably be undisciplined on the large things too.
When I talk to him, he's always up, always positive.
On Warren Buffett
I'm the luckiest guy in the world in terms of what I do for a living. No one can tell me to do things I don't believe in or things I think are stupid.
Warren Buffett
When I go to my office every morning, I feel like I'm going to the Sistine Chapel to paint.
Warren Buffett
Someone once said that in looking for people to hire, you look for three qualities : integrity, intelligence and energy. And if they don't have the first, the other two will kill you. You think about it; its true. If you hire somebody without the first, you really want them to be dumb and lazy.
Warren Buffett
I believe in going to work for businesses you admire and people you admire. Any time you're around somebody that you're getting something out of and you feel good about the organisation, you just have to get a good result.
Warren Buffett
One time we had a dog on our roof, and my son called to him and he jumped. He lived, but he broke his leg. It was awful. The dog that loves you so much that he jumps of the roof ..... you can put people into those situations too. I don't want to do that.
Warren Buffett
If at first you don't succeed, quit trying.
Warren Buffett on Investing
Can you really explain to a fish what its like to walk on land? One day on land is worth a thousand years of talking about it, and one day running a business has exactly the same kind of value.
Warren Buffett
I am a better investor because I'm a businessman and a better businessman because I am an investor.
Warren Buffett
Graham's theories are seldom included in college curriculums today because according to Buffett : "It's not difficult enough. So, instead, something is taught that is difficult but not useful. The business schools reward complex behaviour more than simple behaviour, but simple behaviour is more effective.
Warren Buffett
“ ”
Price is what you pay. Value is what you get.
Warren Buffett
Wall Street is the only place that people ride to work in a Rolls Royce to get advice from those who ride the subway.
Warren Buffett
When proper temperament joins with proper intellectual framework, then you get rational behaviour.
Warren Buffett
In the short run, the market is a voting machine; in the long run its a weighing machine.
Ben Graham
Keynes essentially said, don't try and figure out what the market is doing. Figure out a business you understand, and concentrate.
Charlie and I never have an opinion on the market because it wouldn't be any good and it might interfere with the opinions we have that are good.
Warren Buffett
People would rather be promised a (presumably) winning lottery ticket next week than an opportunity to get rich slowly.
Warren Buffett
It's only when the tide goes out that you learn who's been swimming naked.
Warren Buffett
“ ”
Never ask a barber whether you need a haircut.
Warren Buffett
Forecasts usually tell us more of the forecaster than of the future.
Warren Buffett
You should have a knowledge of how business operates and the language of business (accounting), some enthusiasm for the subject, and qualities of temperament which may be more important that IQ points. These will enable you to think independently and to avoid various forms of mass hysteria that infect the investment market from time to time.
Warren Buffett
Derivatives are seldom well understood by investors and they tend to involve heavy leverage. When you combine ignorance and borrowed money, the consequences can be interesting.
Warren Buffett
Read Ben Graham and Phil Fisher, read annual reports, but don't do equations with Greek letters in them.
Warren Buffett
With enough insider information and a million dollars, you can go broke in a year.
Warren Buffett
If higher math is unimportant in selecting stocks, why are academic and professional journals dense with quantitative analysis?
"Every priesthood does it. How can you be on top if no one is on the bottom?"
Warren Buffett
Its no fun being a horse when the tractor comes along, or the blacksmith when the car comes along.
Warren Buffett
Innovation - that is, entrepreneurship that moves resources from the old and obsolescent to new and more productive employments - is the very essence of economics and most certainly of a modern economy.
Schumpeter
I have now reached the age where I know that it is not enough to be remembered for books and theories. One does not make a difference unless it is a difference in people's lives.
Schumpeter
It is easier to teach a poet how to read a balance sheet than it is to teach an accountant how to write.
Henry Luce
While in the short run, there could be some trade-off between inflation and growth, over the medium and long terms there is no evidence to indicate the existence of such a trade-off. Over a period of time, growth cannot be brought about by inflation.
C Ranagarajan
On the internet there is no shortage of information, but wisdom is a valued commodity.
An organisation's ability to learn, and translate that learning into action rapidly, is the ultimate competitive business advantage.
Jack Welch
First, we look for a business we can understand - where we think we understand its product, the nature of its competition and what can go wrong over time.
Then, when we find that business we try to figure out whether its economics - meaning its earning power over the next five or ten or fifteen years - are likely to be good, and getting better, or poor and getting worse.
Warren Buffett
Most economists are most economical about ideas - they make the ones they learned in graduate school last a lifetime.
Keynes
Turning tail on a company because of one disappointing quarter is like "losing faith in a child after one lousy report card."
Warren Buffett
I believe in free markets, having seen far too much of the alternative.
Peter Drucker
Research is a shortcut to knowledge and understanding which can replace the slower, more precarious road of trial and effort in experience.
Yoder
Anytime there is change, there is opportunity. So it is paramount that an organisation get energised rather than paralysed.
Jack Welch
An economist is one who would marry Bridgette Bardot for her money
Malcolm Forbes
This is the cornerstone of our investment philosophy: Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good result.
Warren Buffett
Save your credit for that is better than money.
Risk is never wedded to one stock or another; it is present wherever investors mindlessly imitate one another.
On Wall Street, it was often the good ideas that got you into trouble, for what the wise did in the beginning, "fools do in the end."
Time is the enemy of the poor business and it's the friend of the great business.
Warren Buffett
Diversification is not a guarantee against loss, only against losing everything at once.
It will appear that a measurable uncertainty or "risk" proper .... is so far differenct from an unmeasurable one that it is in effect not an uncertainty at all.
Frank Knight
Risk, Uncertainty and Profit
So the urgent drives out the important; the future goes largely unexplored; and the capacity to act, rather than the capacity to think and imagine, becomes the sole measure of leadership.
C. K. Prahalad & Gary Hamel
Competing for the Future
The worst rule of management is if it ain't broke, don't fix it. In today's economy, it it ain't broken, you might as well break it yourself, because it soon will be.
D. Calloway, CEO of Pepsico
Profit is an accounting measure; cash is a physical item. Profit is part fact, part opinion and occassionally part hope. Different assumptions, views and accounting treatment will produce different profits. But at any time there is a single indisputable figure for cash; it can be physically counted and checked.
Charlie and I tend to operate in sort of a Norman Rockwell frame of mind. The kind of companies that we like certainly do have a homey, Norman Rockwell, Saturday Evening Post type character.
Warren Buffett
Values: The true measure of performance
The Tata Group
This is a world inhabited not by people who have to be presuaded to believe, but by people who want an excuse to believe.
John Kenneth Galbraith
We learn from history, that we don't learn from history.
"Synergy" like the "yeti" is believed to exist but few can claim to have seen it.
Lionel Robbins on 'mergers'
The airline business is a very tough business. It's capital intensive, it's labour intensive and it's a commodity business. You can't have a worse description than that.
Warren Buffett
Distribution channels can make a fortune or nothing depending on how many channels there are. It there's one pipeline in between, you can make a fortune. If there are a bunch of pipelines, you won't make anything.
Warren Buffett
In a commodity business, it's very hard to be smarter than your dumbest competitor.
Warren Buffett
Only do things that you want to put a lot of money in. If you don't want to put a lot of money in it, it isn't a good idea. Then you don't want it - period.
Warren Buffett
Fools rush in where angels fear to trade.
Whenever someone creates a capital structure that doesn't allow all interest, both payable and accrued, to be comfortably met out of current cash flow net of ample capital expenditures - zip up your wallet.
Warren Buffett
Time is the friend of the wonderful business, the enemy of the mediocre.
Warren Buffett
Science-and-technology stocks rise and fall on their ability to capture and protect their markets from competition.
Technology is the future. This has been a reliable truism since the Stone Age.
Oddly, a lack of reaction in the market is the most significant signal for traders on both the buy side and the sell side. The most important, most dangerous, or most promising thing that can happen in the markets is that "nothing" happens in the wake of a news or earnings report.
In stock picking, getting it right is chiefly a matter of not getting it wrong.
To turn $100 into $110 is work. To turn $100 million into $110 million is inevitable.
One of the lessons your management has learned - and, unfortunately, sometimes re-learned - is the importance of being in businesses where tailwinds prevail rather than headwinds.
Warren Buffett
Turn-arounds" seldom turn.
Warren Buffett
You will find that the state is the kind of organisation which, though it does big things badly, does small things badly, too.
John Kenneth Galbraith
Pricing power: the power to increase prices without a significant loss of market share.
To make money in the stock market, what one needs is not the ability to predict stock price movements but the ability to predict the long-term economic performance of businesses.
Short-term market forecasts are poison and should be locked up in a safe place, away from children, and also from grown-ups who behave in the market like children.
Warren Buffett
An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today.
Lawrence J. Peter
Once a bull market gets under way, and once you reach the point where everybody has made money no matter what system he or she followed, a crowd is attracted into the game that is responding not to interest rates and profits but simply to the fact that it seems a mistake to be out of stocks.
Warren Buffett
You know, someone once told me that New York has more lawyers than people. I think that's the same fellow who thinks profits will become larger than GDP. When you begin to expect the growth of the component factor to forever outpace that of the aggregate, you get into certain mathematical problems.
Warren Buffett
The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company, and above all, the durability of that advantage. The products or services that have wide, sustainable moats around them are the one that deliver rewards to investors.
Warren Buffett
Wealth creation is not an issue to debate. Sometimes globalisation brings a premium, sometimes a negative. The real measure is how fast a company can recover from crises, predictable or unpredictable.
C. K. Prahalad
If an economy is to sustain prosperity, it needs some basic rules: effective corporate guidance standards; adequate external auditing; efficient stock exchanges; transparent banking and legal systems. Except for Singapore, Hong Kong and to a lesser degree Taiwan, these aren't principles that generally adhered to in Asia.
Michael Backman
Company success is inverse to deployment of PowerPoint.
Gross' Law
Tell us what your margins are. Tell us what your capital turnover rate is. If you multiply these two numbers and the number is high, that's when we get interested.
Bill Gurley
The quickest way to make a strategy a loser is to set it in stone.
Good intelligence is nine-tenths of any battle.
Napoleon
Order and simplification are the first steps towards the mastery of a subject.
Thomas Mann
The same thing happened today that happened yesterday, only to different people.
Walter Winchell
I am a strong believer that as one moves towards the future, the strongest and clearest way to do it is if you have a good sense of your past. You cannot have a very tall tree without deep roots.
Cesar Pelli
Value criteria act like a chaperone at a party, making sure you don't fall for some sexy stock with a great story. They may stop you from having some short-term fun, but over time they will keep you out of trouble by never letting you overpay for stocks.
James P. Shaugnessy
What works on Wall Street
“ ”
Being dispassionate is the only way to beat the market over time.
One day, almost a century ago, so the story goes, John D. Rockefeller summoned his advisors on health and gave them an order.
"Gentlemen," he said to the distinguished scientists, "find me a disease I can cure."
The scientists went on to discover a treatment for meningitis and a vaccine for yellow fever. They also cured half a million cases of hookworm in the south.
Productivity is, above all, a state of mind. It is an attitude that seeks the continuous improvement of what exists. It is a conviction that one can do better today than yesterday, and that tomorrow will be better than today.
Furthermore, it requires constant efforts to adapt economic activities to ever-changing conditions, and the application of new theories and methods. It is a firm belief in the progress of humanity.
In general, prices rise by less than wage rates and other input prices to the extent that total productivity rises. Productivity growth is thus an anti-inflationary factor, although inflation is basically a monetary phenomenon.
In dynamic economies the supply of capital has risen faster than the size of the labour force, and wage rates have risen faster that the price of capital. As a result there has been a marked tendency to substitute capital for labour in almost all industries.
Don't hold meetings in conference rooms when there is a problem - go to the workplace, stand there, do it yourself, observe it, discuss it then and there, and decide what to do.
Often managers are like a postman, thinking that they are delegating.
Brutally ask yourself, what is it that you're doing, that prevents people from fully utilising their potential.
A leader doesn't build a business - a leader builds an organisation that builds a business.
I will not accept your guidance and critique unless you are supportive and nurturing. On the other hand, you need to be continually demanding, nagging me to stretch for my next achievement. One of these skills without the other is ineffective.
Believe passionately in what you do, and never knowingly compromise your standards and values. Act like a true professional, aiming for true excellence, and the money will follow.
Professionalism is predominantly an attitude, not a set of competencies. A real professional is a technician who cares.
More than any other factor, it is the people we have to deal with that determine the quality of our work life.
If all you work on is what you already know how to do, you'll eventually be overtaken by someone younger.
The primary role and responsibility of a practice-group leader is to create excitement and enthusiasm.
If your job as a leader is to influence and motivate me and my colleagues, then you must infect us with your personal enthusiasm.
What many firms misunderstand is that their standards and values are not defined by their aspirations but by what they are prepared to enforce.
The more you act selflessly and give clients honest advice, even when it may be counter to your own interests, the more trust you earn, and the more future business you get.
Screen carefully for those who share your ambitions, and be intolerant of moderate performance.
Pay people well and fairly, then do everything possible to help them forget about money.
Treat people like winners and they'll turn out to be winners.
“
The value of brands is that it has as much, if not more, to do with consistency as it does with high levels of performance.
If your think education is expensive, try ignorance.
A bumper sticker
“ ”
Trees decay from the top.
Peter Drucker
How do you send a very strong signal that this is a meritocracy, and this is a place where you are allowed to have a bit of fun, to think unlike the norm, where you are allowed to make a mistake?
Jorma Ollila - CEO Nokia
I've frequently seen things that are politically impossible become politically inevitable.
Paul Krugman
If all you know is what you can measure, you cannot know very much.
The intrinsic value of any business is equal to the current value of all its future cash flows discounted by an appropriate interest rate
Warren Buffett
The strange thing - it's a real contradiction - is that if a business is earning a given amount of money and everything else is equal, the less it has in assets, the more it is worth. You won't get that in any accounting book.
Warren Buffett
The really desirable business is the one that doesn't take any money to operate because its already proven that money will not enable anyone to get a position within the business. Those are the great businesses.
You can have everything you want in life - as long as you help enough other people get what they want.
Save your credit, for that is better than money.
The great man is he who in the midst of crowds keeps with perfect sweetness the independance of solitude.
Emerson
The importance of full consideration of popular sentiment, expectations and opinion - and their effects on the price of the security - cannot be overstressed.
Gerald M Loeb
Without due recognition of crowd-thinking (which often seems like crowd-madness) our theories of economics leave much to be desired.
Bernard Baruch
Nothing sedates rationality like large doses of effortless money.
Warren Buffett
His success, Soros says, consists of knowing when tensions have reached a point where something must give : when a boom is on the verge of bust, or when an oppressed society is at the point of rebellion. "This is when the unexpected can be expected," he says. "And I expect it a little better than others."
Every official responsible for a project should have to list the criteria for failure before he's given the go-ahead.
Not everything that counts can be counted, and not everything that can be counted, counts.
Albert Einstein
Do not argue with the market for it is like the weather - though not always kind, it is always right.
It is difficult to get a man to understand something when his income depends on his not understanding it.
No warning can save a people determined to grow rich suddenly.
Lord Overstone
God is with those who persevere
Quran
Worrying is a waste of time. Worrying gets in my way of working to solve these problems.
Donald Trump
The only reason I go to market is to see if someone is about to do something silly.
Warren Buffett
I can calculate the motions of the heavenly bodies but not the madness of men.
Newton
The bull comes up the stairs and the bear goes out the window.
Success is the ability to go from one failure to another with no loss of enthusiasm.
Winston Churchill
It is almost a mathematical impossibility to imagine that, out of the thousands of things for sale on a given day, the most attractively priced is the one being sold by a knowledgeable seller to a less-knowledgeable buyer.
Warren Buffett
The fundamental principle of economic activity is that no man you transact with will lose; then you shall not.
Arthasastra
Truth, on every plane, is a sword, that wounds deeply; and blood flows freely.
J. T. Kent
Never agree to something proposed on somebody else's boat, or you'll regret it in the morning.
Michael Lewis
Much of what passes for financial innovation is specifically designed to conceal risk or leverage, obfuscate investors and reduce transparency.
Satyajit Das
The superior man understands what is right.
The inferior man understands what will sell.
Confucious
A consultant is someone who takes a subject you understand and makes it sound confusing.
You cannot bribe the upright communist
Even if you're keen to,
But seeing what the chap will do, unbribed
There is no need to.
To err is human, but to blame it on someone else shows managerial potential
The fact that people will be full of greed, fear or folly is predictable. The sequence is not predictable.
Warren Buffett
No man is crushed by misfortune unless he has first been deceived by prosperity
Seneca
Most people struggle financially because they do not know the difference between an asset and a liability.
An asset puts money in my pocket. A liability takes money out of my pocket.
Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets.
Robert Kiyosaki
If a decision is reversible, the biggest risk is moving too slow.
If a decision is irreversible, the biggest risk is moving too fast.
The best lack all conviction, while the worst
Are full of passionate intensity
W.B. Yeats, The Second Coming
Every form of Government tends to perish by excess of its own basic principle.
Aristotle
Revenue is vanity, profit is sanity but cash is king.
A principle for writing, investing, and life in general:
It is much easier to notice when something is working than to predict ahead of time if it will work.
Take action, make many small bets, and run lots of quick (but thoughtful) experiments.
Then, double-down on the winners.
James Clear
“ ”
The multibaggers I chased lost heavily.
The compounders I ignored became multibaggers.
"I have what I call an 'iron prescription' that helps me keep sane when I drift toward preferring one intense ideology over another.
I feel that I'm not entitled to have an opinion unless I can
state the arguments against my position better than the people who are in opposition. I think that
I'm qualified to speak only when I've reached that state…
"That is probably too tough for most people, although I hope it won't ever become too tough for me…
This business of not drifting into extreme ideology is very, very important in life. If you want to
end up wise, heavy ideology is very likely to prevent that outcome.”
Charlie Munger
"And this is one of the great tasks of leadership for us, as individuals and citizens this year.
But even if we act to erase material poverty, there is another greater task, it is to confront the
poverty of satisfaction - purpose and dignity - that afflicts us all. Too much and for too long,
we seemed to have surrendered personal excellence and community values in the mere accumulation of
material things.
Our Gross National Product, now, is over $800 billion dollars a year, but that
Gross National Product - if we judge the United States of America by that - that Gross National
Product counts air pollution and cigarette advertising, and ambulances to clear our highways of
carnage. It counts special locks for our doors and the jails for the people who break them. It
counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It
counts napalm and counts nuclear warheads and armoured cars for the police to fight the riots in our
cities. It counts Whitman's rifle and Speck's knife, and the television programs which glorify
violence in order to sell toys to our children.
Yet the gross national product does not allow for
the health of our children, the quality of their education or the joy of their play. It does not
include the beauty of our poetry or the strength of our marriages, the intelligence of our public
debate or the integrity of our public officials. It measures neither our wit nor our courage,
neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it
measures everything in short, except that which makes life worthwhile.
And it can tell us
everything about America except why we are proud that we are Americans."
Bobby Kennedy
Bobby Kennedy thought GDP measured the least important aspects of what makes a society great.
So did the person who created the concept of GDP. He specifically warned us not to use it as a
measuring stick for how well the country is doing, which is exactly what it's become.
Much like the inventor of the IQ score who wanted his test to help identify at-risk kids and warned
not to use his score as a overall measuring stick for intelligence.
You cannot legislate the poor into freedom by legislating the wealthy out of freedom.
What one person receives without working for, another person must work for without receiving. The government
cannot give to anybody anything that the government does not first take from somebody else.
When half of the people get the idea that they do not have to work because the other half is going to
take care of them, and when the other half gets the idea that it does no good to work because
somebody else is going to get what they work for, that my dear friend, is about the end of any
nation. You cannot multiply wealth by dividing it.
Dr Adrian Rodgers, 1931.
One has to be selective because people who do unwise things in one setting usually proceed to do
unwise things in other setting as well.
In Munger’s words, “…it’s just so useful dealing with
people you can trust and getting all the others the hell out of your life.
Charlie Munger
It’s obvious that if a company generates high returns on capital and reinvests at high
returns, it will do well. But this wouldn’t sell books, so there’s a lot of twaddle and fuzzy
concepts that have been introduced that don’t add much.
Charlie Munger
The situation has provided a cue; this cue has given the expert access to information stored in
memory, and the information provides the answer. Intuition is nothing more and nothing less than
recognition.
Herbert Simon
“ ”
Smart investors force themselves to think stupid in order to beat the market.
If stock market experts were so expert, they would be buying stocks, not selling advice.
Norman Augustine
When Wall Street builds a better mousetrap, investors are generally the mouse.
David Hultstrom
The factors that determine future returns are still out of your control no matter how many
spreadsheet tabs your model uses, and when you let go of caring about having a perfect portfolio
you have fewer knobs to fiddle with, which reduces the chances of regrettable decisions.
A rule of thumb is to prefer the strategy that’s likely to get you closest to your goal with the fewest
number of decisions needed along the way.
The smart money isn’t as smart as it fancies itself, and the dumb money isn’t as dumb as everybody
thinks it is.
The only smart money is the money that knows its own limitations.
Jason Zweig
Kahneman described a study of underwriters at a well-run insurance company.
While not an exact
science, underwriting is a domain with learnable rules where expertise can be developed. The
underwriters all read the same file and determined a premium. That there would be divergence in the
premium set by each was understood. The question was how large a divergence.
“What percentage would you expect?” Kahneman asked.
“The number that comes to mind most often is
10%. It’s fairly high and a conservative judgment.”
Yet when the average was computed, there was 56% divergence.
“Which really means that those underwriters are wasting their time,” he said.
The propensity to gamble is always increased by a large prize vs. a small entry fee, no matter how
poor the true odds may be.
It was Alfred Cowles himself who put his finger on arguably the biggest factor behind the enduring
appeal of active management. Late in life, Cowles was interviewed about his research into market
forecasters. In Peter Bernstein’s 1992 book, Capital Ideas: The Improbable Origins of Wall Street,
he is quoted as saying this:
"Even if I did my negative surveys every five years, or others continued them when I’m gone, it
wouldn’t matter. People are still going to subscribe to these services. They want to believe that
somebody really knows. A world in which nobody really knows can be frightening."
When you do not fear about what society says and just do what you believe is right, you will
always click.
Warren Buffett
I have enough money to last me the rest of my life, unless I buy something.
Jackie Mason
Shorting a stock can be a dangerous business. When you buy a stock (go long) you only have your
investment to lose. If you pay $100 for a stock, it can only go to $0, thereby wiping out your
investment.
However, if you borrow a stock and sell it short, there is technically no limit to high
it could go before you must buy it back to cover your borrowing. If you borrow shares and sell them
at $100 and the price goes to $200, you have lost your entire investment. But if the price goes to
$300 or $400, you would be on the hook for more multiple times your initial position.
“ ”
I think the worst mistake you can make in stocks is to buy or sell based on current headlines.
Warren Buffett
Observation over many years has taught us that the chief losses to investors come from the
purchase of low-quality securities at times of favourable business conditions. The purchasers view
the current good earnings as equivalent to ‘earning power’ and assume that prosperity is synonymous
with safety.
Benjamin Graham
GDP is the currency of the rat-race. It monetises everything. Only things that have a monetary
value are valued in GDP and, by extension, in society, policy and in politics. Therefore, we don’t
value other things. We don’t value community, we don’t value volunteer work, we don’t value
housework”
David Pilling
How wonderful that we’ve met with a paradox, observed Great Danish physicist Niels Bohr,
"Now we have a hope of making some progress."
Bohr wasn’t the only one who thrived on contradictions. It’s said that Einstein discovered relativity by way of resolving an apparent conflict between electromagnetism and mechanics.
A physicist is only too happy, writes Carlo Rovelli in his book Seven Brief Lessons on Physics, “when he finds a conflict of between successful theories: it’s an extraordinary opportunity.”
“ ”
Never buy the leader of a previous bull market.
And as the noted financial writer George J.W. Goodman wrote this in his wonderful book, The Money Game –
"If you don’t know who you are, this is an expensive place to find out." By “this,” Smith meant the stock market.”
The more precise you are, in general the more likely you are to be wrong
J.L. Austin
Lottery: A tax on people who are bad at math
Ambrose Bierce
Its insane to risk what you have for something you don't really need. My partner Charlie says, "there's only three ways that a smart person can go broke -- 'liquor, ladies and leverage.
Warren Buffett
“ ”
In fact the whole trick in life is to become such that your own brains don't mislead you.
Charlie Munger
A banker should not be an optimist.
Charlie Munger
Old age is just one new indignity all the time.
Charlie Munger
As anger comes in, reason leaves. And once that happens, welcome to the house of misery.
Charlie Munger
It’s amazing how if you just get up every morning and keep plugging and have some discipline and keep learning. It’s amazing how it works out okay.
Charlie Munger
The advent of financial news TV mastered the art of saying a tremendous amount of something when nothing needs to be said. Blogs, Twitter, and podcasts have taken it to a new level.
Morgan Housel
A man who risks his entire fortune acts like a simpleton, however great may be the possible gain.
Daniel Bernoulli
As I’ve been calling it: it’s a Harvey Weinstein market.
Old, bloated but if you don’t snuggle up to it it will cost you your career.
Until one day, for no apparent reason, its egregious transgressions finally matter.
Steph Pomboy
$80.7 billion of Warren Buffett’s $81 billion net worth was accumulated after his 50th birthday. Seventy-eight billion of the $81 billion came after he qualified for Social Security, in his mid-60s.
That’s impressive enough. But to really understand these numbers we have to go back half a century.
Thirty is an important age, a time when ambitious workers break free from entry-level jobs and can begin saving real money. The distribution of net worths isn’t particularly stratified for those in the teens and 20s, but starts to spread around age 30. An extra $100,000 of net worth can push someone in their 20s from the 50th to the 95th percentile. By age 30, you need an extra $390,000 of net worth to make that jump.
But Buffett became serious about investing several years before puberty. By the time he was 30 he had a net worth of $1 million, or $9.3 million adjusted for inflation. The 99.99th percentile.
So, let’s do a thought experiment.
What if Buffett got serious about investing when he was age 22 – just out of college – instead of age 10? Imagine he spends his 20s learning about investments, and his net worth at age 30 was in the still-impressive 90th percentile. Using today’s net worth percentiles and adjusting them for 1960s-era inflation, that would mean he’d be worth about $24,000 at age 30.
Now we can do some fun calculations.
If, at age 30, Buffett was worth $24,000 instead of the $1 million he actually accumulated, and went on to earn the same returns, how much would he be worth today?
$1.9 billion.
That’s 97.6% lower than his actual net worth of $81 billion.
The punchline is that 97.6% of Buffett’s current success can be directly tied to the base he built in his teens and 20s. Like World War II-era stuff.
Moderate expertise tells you all the issues you might have to consider. Deep expertise tells you which you can ignore.
Paul Graham
The hurricane is not more or less likely to hit because more hurricane insurance has been written.
In the financial markets this is not true.
The more people write financial insurance, the more likely it is that a disaster will happen, because the people who know you have sold the insurance can make it happen.
So you have to monitor what other people are doing.
The investor who says, ‘This time is different,’ when in fact it’s virtually a repeat of an earlier situation, has uttered among the four most costly words in the annals of investing.
Sir John Templeton
Simplicity is the ultimate sophistication.
Leonardo da Vinci
When a measure becomes a target, it ceases to be a good measure.
Charles Goodhart
If you don't read the newspaper you are uninformed,
if you do read the newspaper you are misinformed."
Mark Twain
I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.
Winston Churchill
A government which robs Peter to pay Paul can always depend on the support of Paul.
George Bernard Shaw
Foreign aid might be defined as a transfer of money from poor people in rich countries to rich people in poor countries.
Douglas Casey, Classmate of Bill Clinton at Georgetown University
Giving money and power to government is like giving whiskey and car keys to teenage boys.
P.J. O'Rourke, Civil Libertarian
“ ”
No man's life, liberty, or property is safe while the legislature is in session.
Mark Twain (1866)
The government is like a baby's alimentary canal, with a happy appetite at one end and no responsibility at the other.
Ronald Reagan
The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin.
Mark Twain
A government big enough to give you everything you want,is strong enough to take everything you have.
Thomas Jefferson
If you think health care is expensive now, wait until you see what it costs when it's free!
P.J. O'Rourke
The amount of energy needed to refute bullshit is an order of magnitude bigger than to produce it."
Brandolini's Law
The burnt customer certainly prefers to believe that he has been robbed rather than that he has been a fool on the advice of a fool.
In 'Where are the Customers’ Yachts' by Fred Schwed
“ ”
When one person doesn't understand economics, we call it ignorance.
When millions don't, we call it a political movement.
"My former boss, Ben Graham, made an observation 50 or so years ago to me that it really stuck in my mind and now I've seen evidence of it.
He said, 'You can get in a whole lot more trouble in investing with a sound premise than with a false premise.'
If you have some premise that the moon is made of green cheese or something, it's ridiculous on its face. If you come out with a premise that common stocks have done better than bonds [well, economists like Edgar Lawrence Smith back in 1924 have shown that this has been the case.]
That became the underlying bulwark for the [1929] bubble. People thought stocks were starting to be wonderful and they forgot the limitations of the original premise [....] So after a while, the original premise, which becomes sort of the impetus for what later turns out to be a bubble is forgotten and the price action takes over.
Now, we saw the same thing in housing. It's a totally sound premise that houses will become worth more over time because the dollar becomes worth less. [...]
And since 66% or 67% of the people want to own their own home and because you can borrow money on it and you're dreaming of buying a home, if you really believe that houses are going to go up in value, you buy one as soon as you can. And that's a very sound premise. It's related, of course, though, to houses selling at something like replacement price and not far outstripping inflation.
So this sound premise that it's a good idea to buy a house this year because it's probably going to cost more next year and you're going to want a home, and the fact that you can finance it gets distorted over time if housing prices are going up 10 percent a year and inflation is a couple percent a year. Soon the price action - or at some point the price action takes over, and you want to buy three houses and five houses and you want to buy it with nothing down and you want to agree to payments that you can't make and all of that sort of thing, because it doesn't make any difference: It' s going to be worth more next year.
And lender feels the same way. It really doesn't make a difference if it's a liar's loan or you know what I mean? [...] Because even if they have to take it over, it's going to be worth more next year. And once that gathers momentum and it gets reinforced by price action and the original premise is forgotten, which it was in 1929.
The Internet was the same thing. The Internet was going to change our lives. But it didn't mean that every company was worth $50 billion that could dream up a prospectus.
And the price action becomes so important to people that it takes over the - it takes over their minds, and because housing was the largest single asset, around $22 trillion or something like that, not above household wealth of $50 trillion or $60 trillion or something like that in the United States. Such a huge asset. So understandable to the public - they might not understand stocks, they might not understand tulip bulbs, but they understood houses and they wanted to buy one anyway and the financing, and you could leverage up to the sky, it created a bubble like we've never seen."
Warren Buffett
A lot of very smart people set out to do better than average in securities markets. Call them active investors.
Their opposites, passive investors, will by definition do about average. In aggregate their positions will more or less approximate those of an index fund. Therefore the balance of the universe-the active investors-must do about average as well. However, these investors will incur far greater costs. So, on balance, their aggregate results after these costs will be worse than those of the passive investors.
Costs skyrocket when large annual fees, large performance fees, and active trading costs are all added to the active investor's equation. Funds of hedge funds accentuate this cost problem because their fees are superimposed on the large fees charged by the hedge funds in which the funds of funds are invested.
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.
Warren Buffett
Economics is the perfect discipline able to predict rationale human behavior with 100% success.
People just keep forgetting the rules.
The only useful purpose of economic forecasting is to make astrology seem respectable in comparison.
J K Galbraith
Expert: A man who makes three correct guesses consecutively.
Lawrence J Peters
Any company that has an economist has one employee too many.
Warren Buffett
They created something that's unwise. You can't form a business partnership with your frivolous, drunken brother-in-law."
Charlie Munger on the Eurozone.
The most boring companies can make some of the best long-term investments.
“ ”
Time in the market is your greatest natural advantage.
Nick Murray
If Berkshire has made a modest progress, a good deal of it is because Warren and I are very good at destroying our own best-loved ideas. Any year that you don't destroy one of your best-loved ideas is probably a wasted year.
Charlie Munger
“ ”
It’s not what you don’t know that will get you in trouble; it’s what you know that ain’t so.
Mark Twain
The more a field is run by a system, the more that system creates incentives for everyone (employees, customers, competitors) to change their behavior in perverse ways — providing more of whatever the system is designed to measure and produce, whether that actually creates any value or not.
Felix Salmon
The more any quantitative social indicator is used for social decision-making,” he wrote, “the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor.”
Campbell’s Law - Donald C. Campbell
"As for the zero sum people who think that to get rich someone else has to get poor, maybe you should stop buying everything. The whole idea of capitalism is that when there is a voluntary transaction, BOTH parties have to end up better off. If you buy a hamburger at McDonalds for $1, you value the burger more than the buck and McDonalds values the buck more than the burger or the transaction wouldn't occur. Or maybe you are stupid and trade things that are valuable to you for things that you don't value. In that case, I have some lint in my pocket I'd like to trade you for your car."
danbert8 in a comment on Dilbert's blog
When broad principles are minutely codified, the rules paradoxically become easier to evade.
George Soros
Considering the current turmoil @ DALAL STREET , our Stock Exchange has revised the following terms:
BSE:- Bombay se exit,
NSE:- Nation se exit ,
F/O:- Future over,
NIFTY: No income for this year,
FII:- Fraudulent international investors,
HNI:- Has no idea,
PMS:- Pre-meditated scam,
SIP:- Suicide by investing patiently,
EBITDA:- Exit before it tumbles down again...
More generally, people tend to overestimate conjunctive probabilities and underestimate disjunctive probabilities. (Tversky and Kahneman 1974.) That is, people tend to overestimate the probability that,e.g., seven events of 90% probability will all occur. Conversely, people tend to underestimate the probability that at least one of seven events of 10% probability will occur.
I had been looking for leaders, but I realised that leadership is about being the first to act.
Edward Snowden
In the families who can afford private education there is a tradition. The clever son goes into banking, the stupid one into politics.
I don't believe in taking right decisions. I take decisions and then make them right
Ratan Tata
Ignorance more frequently begets confidence than does knowledge.
Charles Darwin
Recession is when a neighbor loses his job. Depression is when you lose yours
Ronald Regan
The best thing that happens to us is when a great company gets into temporary trouble...
We want to buy them when they're on the operating table.
Warren Buffett
The most common cause of low prices is pessimism - sometimes pervasive, sometimes specific to a company or industry. We want to do business in such an environment, not because we like pessimism, but because we like the prices it produces.
Warren Buffett
The stock market is a no-called strike game. You don't have to swing at everything - you can wait for your pitch. The problem when you're a money manager is that your fans keep yelling, 'Swing, you bum!'
Warren Buffett An Index is an artificial construct used by the stockmarket to attract investors by "proving" that in the long term the stock market always produces a positive return. Indexes always perform favourably over the long term, they are constructed that way. If a company's value falls too much they are removed from the index and replaced by the next cab off the rank. Unfortunately for the investor, there is no way in the real world to jump from losing horses to winners without suffering costs, so any investment strategy which attempts to track the index will always produce lower returns due to the trading costs. Funnily enough the more closely you attempt to track the index the higher the costs and the greater the variance between the index performance and your own. Apart from trading costs there are also things called unrecoverable losses which in the real world mean the money has gone and can't be converted from one stock to another, see Enron etc. Whereas an index goes to bed with 100 shares in company A and wakes up with 100 shares in company B instead, no harm done.
Before I read the newspaper, I was uninformed. Now that I have read it, I am misinformed. Which is worse?
I have pledged – to you, the rating agencies and myself – to always run Berkshire with more than ample cash. We never want to count on the kindness of strangers in order to meet tomorrow’s obligations. When forced to choose, I will not trade even a night’s sleep for the chance of extra profits.
Warren Buffett
The graveyards of Wall Street and LaSalle Street are full of traders who were right too soon.
Unquestionably, some people have become very rich through the use of borrowed money. However, that’s also been a way to get very poor. When leverage works, it magnifies your gains. Your spouse thinks you’re clever, and your neighbors get envious. But leverage is addictive. Once having profited from its wonders, very few people retreat to more conservative practices. And as we all learned in third grade – and some relearned in 2008 – any series of positive numbers, however impressive the numbers may be, evaporates when multiplied by a single zero. History tells us that leverage all too often produces zeroes, even when it is employed by very smart people.
Warren Buffett
The single most important decision in evaluating a business is pricing power. If you've got the power to raise prices without losing business to a competitor, you've got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you've got a terrible business."
Warren Buffett
There are three rules for running a business; fortunately, we don't know any of them.
Paul Newman on the success of his food business
For every problem there is a solution that is simple, easy and wrong.
H. L. Mencken
Taleb's ten principles for a black swan robust world
Taleb enumerates ten principles for building systems that are robust to Black Swan Events:
1)What is fragile should break early while it is still small. Nothing should ever become Too Big to Fail.
2) No socialisation of losses and privatisation of gains.
3) People who were driving a school bus blindfolded (and crashed it) should never be given a new bus.
4) Do not let someone making an "incentive" bonus manage a nuclear plant – or your financial risks.
5) Counter-balance complexity with simplicity.
6) Do not give children sticks of dynamite, even if they come with a warning.
7) Only Ponzi schemes should depend on confidence. Governments should never need to "restore confidence".
8) Do not give an addict more drugs if he has withdrawal pains.
9) Citizens should not depend on financial assets or fallible "expert" advice for their retirement.
10) Make an omelette with the broken eggs
Be wary of any idea that requires a long explanation. That's a red flag. And be twice as wary of anything that can be explained in four words or less. That's a red flag too.
Scott Adams
Timeless Advice from Warren Buffett
• “Rule No. 1: Never Lose Money.
Rule No. 2: Never Forget Rule No. 1” (1996)
• “Be Fearful when the World is Greedy and Be Greedy when the World is Fearful.”
• “Its not important how big one’s circle of competence is; knowing its boundaries, however, is critical.”
• “I don’t try to jump over 7-foot bars: I look around for 1-foot bars that I can step over.” (1995 Berkshire Annual Meeting)
• “The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage. The products or services that have wide, sustainable moats around them are the ones that deliver rewards to investors.” (Fortune, 1999)
• “When a management team with a reputation for brilliance joins a business with poor fundamental economics, it is the reputation of the business that remains intact”
• “I’d be a bum on the Street with a tin cup if the market were always efficient.” (Fortune, 1995)
• “My idea of a group decision is looking in the mirror”
• “Never ask your barber if you need a haircut.”
• “I believe in going to work for businesses you admire and people you admire. Anytime you’re around somebody that you’re getting something out of and you feel good about the organization, you just have to get a good result. I advise you never to do anything because you think its miserable now, but it’s going to be great 10 years from now, or because I’ve got X dollars now, but I’ll have 10X. If you’re not enjoying it today, you’re probably not going to enjoy it 10 years from now.”
- Focus the new funds and your energy on a relatively few activities in which you can make an important difference.
- Judge programs by how they fit with your goals and their chances for success, not by who makes the request.
- Expect to make mistakes: Nothing important will be accomplished if you make only “safe” decisions.”
Warren Buffet's advice to Charities
It is dangerous to be right in matters where established men are wrong
Voltaire
When an activity raises threats of harm to human health or the environment, precautionary measures should be taken even if some cause and effect relationships are not fully established scientifically. In this context the proponent of an activity, rather than the public, should bear the burden of proof.
The Precautionary Principle
I walk slowly, but I never walk backwards
Abraham Lincoln
Warren Buffett's words of wisdom
• Rule No.1: Never lose money.
Rule No.2: Never forget rule No.1
• Be fearful when others are greedy.
Be greedy when others are fearful
• It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price
• Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down
• Price is what you pay. Value is what you get
• It takes a lifetime to build a reputation and five minutes to ruin it
• Cash combined with courage in a crisis is priceless
• Never invest in a business you cannot understand
• Only buy something that you'd be perfectly happy to hold if the market shut down for ten years
• Someone is sitting in the shade today because someone planted a tree a long time ago
• Risk comes from not knowing what you're doing
• If you don't feel comfortable owning something for 10 years, then don't own it for 10 minutes
• If a business does well, the stock eventually follows
• I wouldn't mind going to jail if I had three cellmates who played bridge
• The fact that people will be full of greed, fear or folly is predictable. The sequence is not predictable
Envy is a really stupid sin because it's the only one you could never possibly have any fun at. There's a lot of pain and no fun.
Charlie Munger
I think that one should recognize reality even when one doesn't like it -- indeed, especially when one doesn't like it."
Charlie Munger
Andrew Lo, of MIT’s Sloan School of Management, was fond of pointing out that in the physical sciences three laws can explain 99% of behaviour, whereas in finance 99 laws can explain at best 3% of behaviour.
To find a great truth, it is first necessary to lose your illusions.
A very rich man "should leave his kids enough to do anything but not enough to do nothing."
Warren Buffett
Research has shown again and again that regardless of the size of their winnings, most lottery winners eventually return to their original financial state, the amount that they can comfortably handle.
The know-nothings are, unfortunately, seldom the do-nothings.
Mignon McLaughlin
“ ”
Lethargy bordering on sloth remains the cornerstone of our investment style
Warren Buffett
Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy when others are fearful."
Warren Buffett
Your stock broker doesn't hate you. I think your broker views you like a dairy farmer views a cow. Do whatever you can to get every last drop of milk out using whatever means possible and, then when no more milk comes out, butcher the cow and sell the meat.
One can ignore reality, but one cannot ignore the consequences of ignoring reality
Ayn Rand
Beware of geeks bearing formulas
Warren Buffett
The only function of economic forecasting is to make astrology look respectable.
John Kenneth Galbraith
An investor needs to do very few things right as long as he or she avoids big mistakes.
Warren Buffett
Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily understandable business whose earnings are virtually certain to be materially higher five, ten and twenty years from now.
Warren Buffett
Hire well; manage little
Warren Buffett
Sustained progress requires skill and consistent application of sound principles.
Philip Fisher
Being rich is having money. Being wealthy is having money and time.
Stephen Swid
A man in a hot air balloon realized he was lost. He reduced his altitude
and spotted a woman below.
He descended a bit more and shouted: "Excuse me, can you help me? I
promised a friend I would meet him an hour ago, but I don't know where I
am."
The woman below replied:
"You're in a hot air balloon hovering approximately 30 feet above the
ground. You're between 40 and 45 degrees north latitude and between 59 and 60 degrees west longitude."
"You must be a equity research analyst," said the balloonist.
"I am," replied the woman, "How did you know?"
"Well," answered the balloonist, "everything you told me is technically
correct, but I've no idea what to make of your information, and the fact is
I'm still lost. Frankly, you've not been much help at all. If anything,
you've delayed my trip."
The woman below responded, "You must be a Fund Manager"
"I am!" replied the balloonist, "but how did you know?"
"Well", said the woman, "you don't know where you are or where you're
going. You have risen to where you are, due to a large quantity of hot air.
You made a promise, which you've no idea how to keep, and you expect people beneath you to solve your problems. The fact is you are in exactly the same position you were in before we met, but now, somehow, it's my fault."
So often it is the truly brilliant who have a tendency to remain silent because they know too much rather than too little.
Jeffrey Archer
''Synergy'' is one of the key words used by business professionals to indicate that they have no clue as to what business they are actually in.
Dave Barry
If Calculus or Algebra were required to be a great investor, I'd have to go back to delivering newspapers."
Warren Buffett
There seems to be some perverse human characteristic that likes to make easy things difficult.
Warren Buffett
You can get in way more trouble with a good idea than a bad idea, for what the wise did in the beginning, fools do in the end.
Warren Buffett
Herbert Allen thought the "new paradigm" for valuing technology and media stocks–based on clicks and eyeballs and projections of far-off growth rather than a company's ability to earn cold hard cash was bunk. "New paradigm," he sniffed. "It's like new sex. There just isn't any such thing."
His father's struggles branded three principles even deeper into Warren Buffet: that allies are essential; that commitments are so sacred by nature they should be rare; and that grandstanding rarely gets anything done.”
The market is extremely efficient at transferring wealth from the impatient to the patient.
Warren Buffett
A brilliant idea looks exactly like a stupid idea, right up until the moment that it works.
It is the mark of an educated person to look for precision only as far as the nature of the subject allows.
Aristotle
Risks are passed on from those who know them best to those who are less familiar with them
George Soros
Globalisation also has an asymmetric structure. It favours the United States and other developed countries at the center of the financial system and penalises the less-developed economies at the periphery.
George Soros
Financial markets do not necessarily tend towards equilibrium; left to their own devices they are liable to go to extremes of euphoria and despair.
George Soros
The more an investment thesis is at odds with the generally prevailing view, the greater the financial rewards one can reap if it turns out to be correct.
George Soros
Where money is free, the lender will keep on lending until there is no one left to lend to.
George Soros
Market participants act on the basis of imperfect understanding, and their actions have unintended consequences.
George Soros
A 14-year-old came to Mozart and said, “I want to learn to be a great composer.” And Mozart said, “You’re too young.” The young man replied, “But I’m 14 years old and you were only eight or nine when you started composing.” To which Mozart replied, “Yes, but I wasn’t running around asking other people how to do it.”
Charlie Munger
The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage.”
Warren Buffett
By the time a fund manager or economist discovers he has no talent
for investments or economics, he is too successful to give it up!
Marc Faber
Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful."
Warren Buffett
The only reason we have "experts" on the stock market is that people want to fool themselves into thinking that someone knows what is going on.
Now people have entirely too much time on their hands to devote to CNBC and Money magazine. People suddenly think they are smarter than they used to be because they have more time to pay attention to it.
The more closely you pay attention, the more you do things. And the more you do things, the worse off you will be.
Barbara Warner
In fact, in most situations what you don't know is so overwhelmingly more important than what you do know that you have no business acting on what you know.
Daniel Kahneman on Investing
One of my favorite stories is a boy in Texas, when the teacher asked the
class the following question. There are nine sheep in pen, and one jumps out, how many are left? Everyone got it right, and said eight are left. The boy said none are left. The teacher said you don’t understand arithmetic, and he said ‘no you don’t understand sheep’.
Charlie Munger
Wall Street is always going to go where the money is and not worry about the consequences. First they invent things they shouldn't sell to anybody, then they end up selling them to their grandmothers.
Charlie Munger
Warren Buffett on the subprime crisis:
"You can't turn a financial toad (into a prince) by kissing it or by securitizing it or by transferring its ownership to somebody else."
"One can make more money selling toxic waste to customers, but that doesn't mean it's a good idea."
"Wall Street started believing its own PR on this - they started holding this stuff themselves - maybe because they couldn't sell it. It worked wonderfully until it didn't work at all."
The importance of knowing accounting cannot be underestimated; its the language of business. If you don't know it, it's like being in a foreign country without knowing the language.
Warren Buffett
The obvious is obviously wrong.
Joe Granville
“ ”
Beware the glib helper who fills your head with fantasies while he fills his pockets with fees.
Warren Buffett
“I constructed a system that overcame the necessity of specific knowledge across a wide range of industries. In short, I asked the right questions by seeking the ‘variant perception’ inherent in each idea. A summer intern reminded me years later of the advice I had given him on his first day at work. I told him that ideally he should be able to tell me, in two minutes, four things: the idea; the consensus view; his variant perception, and a trigger event. No mean feat. In those instances where there was no variant perception – that is, solid growth recommendations within consensus – I generally had no interest and would discourage investing.”
Michael Steinhardt
Bogle believes investors should simply buy the lowest-cost index funds available and hold them forever. His rule of thumb is to take your age minus 10 and hold that percentage of your assets in a total bond market index fund and the rest in a total stock market index fund. For example, a 30-year old would put 20 percent in bonds and 80 percent in stocks.
This strategy nearly eliminates "the two greatest enemies of equity investing -- expenses and emotions," Bogle said.
Bogle also said he would "drop all high school stock-picking contests immediately. I'd replace them with a one-hour class and a large-print book on the miracle of compounding returns and the tyranny of compounding costs."
Ms. Market, we have found, is like a woman - coy, changeable and
contemptuous of our efforts to understand her. Will she be perky and
charming today? Or will she be sulky and distant? What is bothering her
now? Oh my, my...she seems frisky today, doesn't she? We will never
fathom what moves her; we might as well be a golden retriever trying to
decipher the Tokyo train schedules.
But market commentary is another thing altogether. It is more
masculine, which is to say it is more logical, more understandable, more reliable, and more thoroughly imbecilic. Just read the papers. You will find
analyses there that even a 10-year-old could grasp. Are they correct?
No more correct than a man trying to dope out his mistress's moods. Are
they useful? Yes, of course. Mainly because they are almost always wrong.
Commentators, it seems, are from Mars. Markets are from Venus.
And like Mars and Venus, they move in separate orbits.
We say that, mind you, in earnest admiration. Not of the financial
media nor of the pundits, but of the elegant way in which the world is
designed to deceive the mass of men. In order for the markets to function as
they do, most investors must be wrong most of the time. Otherwise, they
would look ahead and thwart the trend. A developing bull market requires that most people distrust it. Otherwise, they would jump in right away and
bring the whole thing to a premature conclusion. Likewise, a market
peak needs a preponderance of bullish investors at the very moment when
bullishness is the most unprofitable sentiment one could have.
The financial media, amplifying popular sentiments rather than
filtering them, helps investors arrive where they shouldn't be exactly when they most shouldn't be there.
We should manage our fortunes as we do our health - enjoy it when good, be patient when it is bad, and never apply violent remedies except in an extreme necessity.
My favourite Einstein joke
Einstein dies and goes to heaven. Since heaven, for obvious reasons, is
a centrally planned economy, St. Peter sheepishly informs him that they
have a temporary housing shortage. He'll have to bunk with three other guys
for a while.
Of course his new roomies are thrilled. The first one comes up to him
and says: "Mr. Einstein, it's an honor to meet you. But I'd like to get to
know you better. I have an IQ of 230". So Einstein says: "Great. After
lunch, let's bounce around some ideas on astrophysics I've been working
on."
Then the second one comes up to him, and says: "Mr. Einstein, it's an
honor. I'd also like to get to know you. I have an IQ of 130." So
Einstein says: "Fine. Let me put my grip away, and we'll have a game of chess."
Then the third one walks up, and says: "Hi, Mr. Einstein. I'd also like
to get to know you. But I'm afraid I'm not as smart as those other guys;
I've only got an IQ of 70."
Einstein says: "So where do you think the stock market is going?"
The banking industry has done a great thing, says another smug
economist from the American Banking Association. By encouraging people to borrow against their houses it has helped people "free up illiquid assets." In 2005, they helped people "free up" $200 billion worth of illiquid
assets.
Surely, they should get a Nobel Peace Prize for that! Imagine all those
poor people who have been liberated from their own houses. Last year,
they owned a roof over their heads, or "illiquid asset." Now, they own last
year's hit CDs and have fond memories of last year's vacations in Las
Vegas. Of course, they now have a deeper, more meaningful relationship
with a lending institution, too.
On the subprime crisis
We heard a rumor the other day that our company had made an extraordinary amount of money this year. Fifty million dollars was the number we heard. It recalls the story of the Texas oilman who made $1 million from a single well outside of Dallas. The man in question heard the story and turned to his friend:
"Well," he said, "it wasn't really an oil well...it was natural gas.
And it wasn't really outside of Dallas; it was outside of Houston.
And it wasn't really a million dollars; it was two million.
And it wasn't really me; it was my brother.
And he didn't really make it; he lost it."
“ ”
Most successful investors position themselves for long-term trends and ignore everything else.
If they react to the short-term sell-offs at all, they do so as buyers, NOT as temporary sellers.
Classic perceptions of value, and hence of bubble theories, over the past two decades have developed a tendency to explain not how the market works, but how it ought to work.
Nearly every mutual fund organization (besides Bogle's Vanguard) is run by an external management company, "with its own set of shareholders," that make all decisions regarding the mutual funds themselves: what fees to charge, who will manage the fund and what funds to create.
The trouble is that small fees, a few dollars per hundred dollars invested, add up over time in the same way that compound interest can make a small investment huge.
So how do we fix an industry — moreover, an economic paradigm — in which shareholders put up 100% of the cash, assume 100% of the risk and get only 25% of the returns?
John Bogle
Capitalism Without Owners Will Fail.
John Bogle
The force of a correction is equal and opposite to the deception and delusion that preceded it.
Bill Banks
Markets behave in ways, sometimes for a very long stretch, that are not linked to value
Warren Buffett
This is the belief that markets are self-correcting and best left alone. Soros calls this a dangerous siren song. Far from being self-correcting, he emphasises, "markets tend to excess. They over-shoot. Anyone with any experience of markets knows this."
"When markets are going down, all the weaknesses get concentrated, and you need intervention at the right time to stop things from getting out of control. If the dollar started to melt down, the results could be really nasty. A 1930s-style global depression is not out of the question."
George Soros
Now consider this: there are currently 8000 hedge funds in the US alone. Every day $6 trillion of derivative instruments trade on international markets. If there are four people in the world who understand those trades, I'd be surprised.
It’s not whether you’re right or wrong, but how much money you make when you’re right and how much you lose when you’re wrong.
George Soros
When the blind lead the blind get out of the way.
The best decision is one that can be easily changed.
If you jump out of a window on the 42nd floor, just because you’re still
doing fine at the 20th floor doesn’t mean you don’t have a serious problem.
Charlie Munger
Zweig summarises his approach with the motto : "Don't fight the
tape." Sounds simple, and sensible, but its difficult in
practise, because pragmatism can as easily be a sin as a virtue.
If it isn't coupled with discipline, flexibility can get you
whipsawed by every blip in the market. Zweig manages the
extremely difficult job of combining discipline with flexibility.
The declines that trouble me are the ones we don't understand;
when the rationale for selling is not obvious. When the market
drops on some obvious piece of bad news, that's okay. The market
will recover when people realise that its not the end of the
world. When it dips and there is no obvious reason for it, that's
the time to worry.
The most strident bulls are people who missed the rally and are
trying to compensate by shouting louder and longer than anyone
else.
Mr Buffet's net worth, as measured by Berkshire's price, fell by
half. "How do you feel?" he was asked. Said Mr Buffet: "Like an
oversexed guy in a whorehouse."
Real listening in a committee meeting has always been a near
impossibility. Each member's function was to talk, and while
other people were talking the individual member was busy
figuring out what he ought to say next in order to shore up his
own position. Debating is what committees really do, not
thinking. Take away the need for winnning points, leading the
discussion, protecting one's face, gaining applause, shouting
down opposition, scaring opponents, all that kind of noisy
activity, and a group of bright people can get down to quiet
thought.
Lewis Thomas ---- The Medusa and the Snail
Acquisitions are about buying market share. Our challenge is to
create markets. There is a difference. Creating markets is
something two out of three times you fail to do. But the third
time, if you create it and you are the first, it can grow
rapidly.
Managers thinking about accounting issues should never forget one
of Abraham Lincoln's favourite riddles:
"How many legs does a dog have, if you call its tail a leg?"
The answer: "Four, because calling a tail a leg doesn't make it a leg."
A depressed stock market is likely to present us with
significant advantages. So when the market plummets - as it will
from time to time - neither panic or mourne. It is good news for
Berkshire.
Warren Buffet.
"We are successful. What we're doing has worked for decades."
This is what is the curse of success. It keeps your eyes focussed
dead ahead, not seeing the edge, where the opportunities are.
`Edge' people are easy to recognise, says author Wayne Burkan
(Wide Angle Vision).
They're not interested in creating change or producing
turbulence. They're not trying to be radical.
They only want to solve their own problems. They're dissatisfied
with today's solutions.
What makes them different is not that they have different
solutions to problems, but different problems, problems the rest
of us don't even see.
Always buy the guy they spin off, never keep the parent.
Lee R. Forker Jr.
If you were in the securities business in the
1960s, you should remember Walter Gutman. If you don't,
well, I'm sorry. You missed one of the most original letter
writers to come out of Wall Street. One letter that he wrote
that made a lasting impression on me featured an analysis of
IBM, which at the time sold at a staggeringly high
price/earnings ratio.
By way of demonstrating the futility of making straight-line
growth projections, Walter took the Street assumptions about
the future growth of sales and earnings and ran them out for
the rest of the century to show that if the analysts were
right, IBM's sales by the year 2000 would be greater than
the combined GNP of all the nations on the planet.
This, of course, raised an interesting logical conundrum.
The estimates could only be (a) right or (b) wrong. But if
they were right, the outcome was clearly impossible.
Therefore, they must be wrong. But the market did not oblige
Walter right away. IBM carried an absurd valuation into the
decade of the 1970s and was one of 1972's darling
one-decision stocks. In the jargon of the day, that meant
that the only decision you ever had to make was the decision
to buy. You would never sell. That may sound like Warren
Buffett's ``my favorite holding period is forever,'' but
it's not the same. Buffett is only expressing a preference.
Something like (we'd like to believe) ''my favorite animal
is the unicorn.''
WILLIAM MASON - Barrons Mar 97.
There are two main ways to measure a budget. One is to ask
whether its broad, macroeconomic stance is likely to be
appropriate.
The second way to measure a budget is to look at its
microeconomic effect - how tax changes are intended to alter
behaviour. The best sort of budget seeks to distort private
choices as little as possible.
Economist - July 5, 1997.
Companies have to create an environment where people don't resist
change, but really expect it. An environment where companies
cannibalise their own products, instead of waiting for some
competitor to do it.
Michael Porter
If you want to escape the gravitational pull of the past, you
have to be willing to challenge your own orthodoxies, to
regenerate your core strategies, and rethink your most
fundamental assumptions about how you are going to compete. Often
it takes a crisis before a company is willing to do that. It
takes a sense of urgency, a sense that the company's future
success is not inevitable.
C K Prahlad
As the world becomes more global, we tend to think more tribally.
So now its "Think Locally", or tribally and "Act Globally". The
more universal we become the more tribal we act. The more we
become dependant economically on others, the more we hold on to
what constitutes our basic core identity.
John Naisbitt
If people are good at work, then they are too valuable to be put
into management.
Michael Hammer
The key to good pricing is to figure out to whom you want to sell
the product and what they think of the product - what they think
it is worth - and then to design the product and its service
bundle so that it can be priced that way. Every product should be
designed with a specific group of customers - and a price they
are willing to pay - in mind. The rest is to engineer down the
costs in order to make the target profit.
Philip Kotler
The dynamic economies of the future will be those that unlock the
talent of all their people, and our creativity, our adaptability,
our belief in hard work and self-improvement, the very qualities
that made Britain lead the world in the 18th and 19th centuries,
are precisely the qualities we need to make Britain a strong
economic power in the 21st century. ........ But to achieve this
we must address the four weaknesses that have held us back for
too long and for too many years - instability, under-investment,
unemployment, and the waste of talent. ....... In this budget, I
will address each of these weaknesses in turn to ensure
stability, investment, work and opportunity for all.
Gordon Brown, Chancellor of the Exchequer,
BusinessWorld 7/8/97
Economic Growth is the combined result of three factors: first,
the savings rate (the amount of capital that can be raised
domestically); second, the current account deficit (which is an
indicator of how much foreign capital the country can absorb);
three, the capital-output ratio (which determines how efficiently
domestic and foreign capital is used). The other routes to
economic growth are always attractive but prone to sudden
accidents.
S S Tarapore BusinessWorld 7/8/97
We're not trying to target any particular cash level. Today it's roughly 20%. And in the 40+ year history of Templeton Growth Fund, there hae been times in the past when our liquid assets have been equally high. So its not a first for us.
Mark Holowesko - OID DEC '97
On Estate Duty:
Because transfer of shares from one generation to another are taxed based on the share price, they have no incentive for the share price to go up. In fact, quite the contrary.
And at that moment, I began to fully appreciate exactly what a Chaebol really is. Here's the correct definition: "A diverse group of poorly managed, unrelated entities with little or no synergies whose primary purpose is the lifetime employment of woefully underutilised employees in the generation of consistently substandard returns."
Mark Bakar, Valuevest Management - OID DEC '97
We also look for easy-to-understand businesses that are growing profitably and earning high returns that don't need much incremental capital to grow. We want them to be operated by capable, honest managers who have equity stakes in thse businesses and who are accesible to us. And, needless to say, we want to buy 'em right.
Mark Bakar, Valuevest Management - OID DEC '97
The world bank has said that five countries would drive the world's economic growth in the 21st century. China, Russia, India, Indonesia and Brazil.
Mark Bakar, Valuevest Management - OID DEC '97
The lesson companies learnt after the stock markets plummeted last fall is that volatility always has and always will exist, whether you view it as a devil or as a god.
Management review - April 1998.
Stocks have a long historical track record of outperforming other investments. In the long run, stocks have beaten alternative investments such as bank accounts, bonds, real estate and commodities.
What we do is not beyond anybody else's competence. It is just not necessary to do extra-ordinary things to get extra-ordinary results.
Warren Buffett
The critical issue is not the business or the economic cycle, but the psychological cycle.
Warren Buffett
Look at stocks as businesses, look for businesses you understand, run by people you trust and are comfortable with and leave them alone for a long time.
Warren Buffett
To swim a fast 100 metres, its better to swim with the tide
Warren Buffett
The bulk of the portfolio should be world-class companies that can sustain above-market rates of earnings growth. The keyword here is sustain.
Warren Buffett
You want companies that are generating cash in excess of their needs, virtually immune from inflation and capable of continued growth.
Warren Buffett
With profits not taken, there remains a theoretical tax liability, but the money is still working for you.
Warren Buffett
'tis the stone that will turn all your lead into gold. Remember that money is of a prolific generating nature. Money can beget money, and its offspring can beget more.
Benjamin Frankin
The more you hate risk, the more you should prefer stocks to bonds and vice versa.
Warren Buffett
As long as excess productive capacity exists, prices tend to reflect direct operating costs rather than capital employed
Warren Buffett
We select our marketable equity securities in much the same way we would evaluate a business for acquisition in its entirety. We want the business to be (1) one that we can understand (2) with favourable long-term prospects (3) operated by honest and competent people and (4) available at a very attractive price
Warren Buffett
In large part, companies obtain the shareholder constituency that they seek and deserve. If they focus their thinking and communications on short-term results or short-term stock market consequences they will, in large part, attract shareholders who focus on the same factors.
Warren Buffett
Its no fun being a horse when the tractor comes along.
Warren Buffett
People would rather be promised a (presumably) winning lottery ticket next week than an opportunity to get rich slowly.
Warren Buffett
When proper temperament joins with proper intellectual framework, then you get rational behaviour.
Warren Buffett
You do not adequately protect yourself by being half-awake when others are sleeping
Warren Buffett
A good buying time occurs in the absence of exictement - when there are doubts about the market's ability to pick up and rally again.
Warren Buffett
With enough inside information and a million dollars you can go broke in a year.
Warren Buffett
Investing does not require a genius. What it needs is, first, reasonably good intelligence; second, sound principles of operation; third, and most important, firmness of character.
Warren Buffett
Don't let the market's day-to-day ups and downs distract you from what you want to accomplish over the years.
Charles Schwab
The key to making big money in the stock market lies not in making the big gain. The key is not losing money.
Disparity in market performance generally boils down to how well each investor - individual or institutional - can invest against his emotions. So keeping a clear head means the difference between profits and losses.
Sir,
Engineers and scientists will never make as much money as business executives. A rigorous mathematical proof explains why this is true:
Postulate 1: Knowledge is power
Postulate 2: Time is money
As every engineer knows:
Power = Work/Time
Since: Knowledge = Power and Time = Money
Then: Knowledge = Work/Money
Solving for Money we get:
Money = Work/Knowledge
Thus, as knowledge approaches zero, money approaches infinity regardless of work done.
Conclusion: The less you know, the more you make (but you probably knew that already).
Letter in Economist by Paul Wesel, Boston.
There are many things we cannot predict about where the current wave of change will take us. We can, however, be sure that innovative companies and societies will be the ones that thrive.
Paul Romer
Only in America... do we use the word "politics" to describe the
process so well: "Poli" in latin meaning "many" and "tics" meaning
"blood-sucking creatures"...
Charles Dickens' Mr Macawber said it best, "Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought six, result misery."
Drucker sees the major industries - "automobiles, steel, rubber, electrical apparatus, consumer electronics, telephones, petroleum as resting on nineteenth century breakthroughs in technology. Apparently thriving through the 1960s, in fact they were corroding from within and beginning to suffer permanent job losses.
Turning tail on a company because of one disappointing quarter is like "losing faith in a child after one lousy report card."
The greatest investment opportunities did not require purchasing on a particular day at the bottom of a great panic. The shares of these companies were available year after year..... What was required was the ability to distinguish these relatively few companies with outstanding investment possibilities from the much greater number, whose future would vary all the way, from moderately successful to the complete failure.
Philip Fisher
An organisation's ability to learn and translate that learning into action rapidly , is the ultimate competitive business advantage.
Jack Welch
At the beginning of the century, 68% of Japan's labour force worked on the land, 44% of America and about 20% of Britains'. Today, agriculture accounts for 7% of workers in Japan, 3% in America and 2% in Britain.
A knowledge worker, today's bosses say only half in jest, is someone who can never quite manage to define their own job.
The more small firms there are in the economy, the greater the speed and scale of competition and innovation.
Luck is where opportunity meets preparedness.
If you know how to spend less than you get, you have the philosospher's stone.
Benjamin Franklin
Buy when the cannons are thundering, and sell when the violins are playing.
N M Rothschild
The lowest form of thinking is the bare recognition of the object. The highest is the comprehensive intuition of the man who sees all things as part of the system.
Plato
The most successful man in life is the man who has the best information.
Benjamin Disraeli
Whether you think you can or whether you think you can't - you're right
Henry Ford
The man who is cocksure he has arrived is ready for the return journey. So are business concerns. When they become satisfied that there is nothing more for them to learn, and that they can dispense with any and every aid to success, they are headed for trouble.
B C Forbes
Time is the measure of business, as money is of wares
Francis Bacon
Nothing concentrates a man's mind so wonderfully as the prospect of being hanged in the morning.
Samuel Johnson
You get what you expect to get. Seldom, if ever, do you get more.
Harold S Geneen
No business can be successful over the long run without effective procedures for tracking costs and revenues.
When you're drowning in numbers, you need a system to separate the wheat from the chaff.
Anthony Adams
Everything should be made as simple as possible, but not more so.
Albert Einstein
He who controls the past controls the future.
George Orwell
Productivity is not everything, but in the long run it is almost everything.
Paul Krugman
Asked when the bubble would burst, Mr Buffett said, "You never know. You know that valuations are high, by historic standard. You know that the level of speculation is high, by any historic standards, and you know that it doesn't go on forever.......but you don't know when it ends."
Small is good, micro is not. For the littlest companies, its like auditioning for a chorus line: one misstep and you're out.
Ralph Wanger - A Zebra in lion country.
Success in investing does not correlate to I.Q. once you're above the level of 25. Once you have ordinary intelligence, what you need is the temperament to control the urges that get other people into trouble in investing.
Warren Buffett
We don't do due diligence or go out kicking tyres. It doesn't matter. What matters is understanding the competitive dynamics of a business.
Warren Buffett
I've never had a target price or a target holding period on a stock.
Warren Buffett
How do you beat Bobby Fischer? You play him at any game but chess. I try to stay in games where I have an edge, and I will never will in technology investing.
Warren Buffett
In an effort to protect one job today, you are inhibiting the ability to create two jobs in the future.
Charles Dallara
Bull markets are born on pessimism, grow on
skepticism, mature on optimism, and die on euphoria
Michael B. Steele
The wildly insane Internet bubble wasn't so different from previous bubbles that I've studied in my 88 years. In almost every case, within a year after the bubble burst, people were eager to buy again. Invariably, it was too soon. Think about the great stock-market collapse of 1929. After a few months, stocks began to climb, and people jumped in again, thinking the downturn was over. But it lasted for three years. You'd be surprised how low the market can go and how long it can take to recover. If you had bought on the top day in 1929, you wouldn't have seen a net profit for 17 years. The lesson? Don't buy too soon.
Sir John Marks Templeton
The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.
Sir Winston Churchill
I've noticed that the press tends to be quite accurate, except
when they're writing on a subject I know something about.
Keith F. Lynch
Money will not make you happy, and happy will not make you money.
Groucho Marx
The difference between investing and speculating :
Well, first of all, the difference between investing and speculating is when you're investing, I would say you're looking around trying to buy a dollar bill for 60 cents, let's say. And when you're speculating, the intrinsic value of the dollar bill has no interest to you. You'll buy a dollar bill for three dollars if you think you can sell it for four. And in the environment we're in today is much more about speculating. The risk is that the dollar bill's only worth one. And if people believe it's worth three or four, that works only until it doesn't. It's the emperor not wearing any clothes kind of an argument.
Bill Fleckenstein
There are three faithful friends, an old wife, an old dog, and ready
money.
Benjamin Franklin
If you spend 13 minutes a year on economics, you've wasted 10 minutes.
Peter Lynch
How MARKETS work!!!
It was autumn, and the Red Indians on the remote reservation asked their new Chief if the winter was going to be cold or mild. Since he was a Red Indian Chief in a modern society, he had never been taught the old secrets, and when he looked at the sky, he couldn't tell what the weather was going to be. Nevertheless, to be on the safe side, he replied to his tribe that the winter was indeed going to be cold and that the members of the village should collect wood to be prepared. But also being a practical leader, after several days he got an idea. He went to the phone booth, called the National Weather Service and asked "Is the coming winter going to be cold?" "It looks like this winter is going to be quite cold indeed," the meteorologist at the weather service responded. So the Chief went back to his people and told them to collect even more wood in order to be prepared. A week later, he called the National Weather Service again. "Is it going to be a very cold winter?" "Yes," the man at National Weather Service again replied, "It's definitely going to be a very cold winter." The Chief again went back to his people and ordered them to collect every scrap of wood they could find. Two weeks later, he called the National Weather Service again. "Are you absolutely sure that the winter is going to be very cold?" "Absolutely," the man replied. "It's going to be one of the coldest winters ever." "How can you be so sure?" the Chief asked.
The weatherman replied, "The Red Indians are collecting wood like crazy."
Hugh Liedtke, the former CEO of Pennzoil, used to joke that he believed in the "bladder theory": Companies pay dividends so that management can't piss all the money away.
If you aren't diversified enough, you aren't aggressive enough.
You never know where the next bull run is going to be.
I have endured a great deal of ridicule without much malice; and have received a great deal of kindness, not quite free from ridicule.
Abraham Lincoln
• At the time of making an investment, ask yourself how much optimism or pessimism is already factored into this price.
• Buying good companies DOES NOT EQUAL buying companies well. Entry price is the most important criteria for making any investment decision, be it a high quality company or a junk bond. At the right price, even a junk bond is AAA
• If you are not confused, you are doing it wrong. No good investor is 100% sure of the future outcome. You have to be unsure and skeptical. If something is obviously great, then it won’t be a bargain. I am always worried when I make an investment decision. That’s the only way there is. You can never be totally confident of a thesis.
• If someone says where are interest rates, currency etc headed, they have no idea what they are talking about. In 1982 Fed Chairman said in an interview – “If someone asks me if interest rates will go up or down, my answer is YES.
• Investing is like being an airline pilot. Hours of boredom punctuated by moments of terror
• When there is nothing clever to do, mistakes lie in trying to do something clever
• High risk DOES NOT EQUAL High return. If high risk means high return, then it’s not high risk by definition. In fact, in investing - LOW Risk = HIGH Return…Always think of the downside or the worst case scenario. Avoid downside and the upside will take care of itself. Unless you are a professional tennis player, avoiding unforced errors is more important than hitting aces. Just keep the ball in the play, and you will win.
• Advice for investors. 1) be unemotional and 2) read anything and everything you can lay your hands on.
Extracts from 'Rich Dad's Guide to Investing' by Robert Kiyosaki
The Charlie Munger Collection
The Warren Buffett Collection
You don’t want to be like the motion picture executive in California.
One day, in a moment of frightening enlightenment, I knew that I really did not know exactly how and why I had made all the money that I had over the prior 17 years. This threw my confidence for a jolt.
When Wall Street builds a better mousetrap, investors are generally the mouse.
I have enough money to last me the rest of my life, unless I buy something.
By the time a fund manager or economist discovers he has no talent
for investments or economics, he is too successful to give it up!
