Investing Quotes - Page 23

• The considerations upon which expectations of prospective yields are based are partly existing facts which we can assume to be known more or less for certain, and partly future events which can only be forecasted with more or less confidence.

  John Maynard Keynes

  Yield, Expectations, Facts

  John Maynard Keynes (2006). “General Theory Of Employment , Interest And Money”, p.132, Atlantic Publishers & Dist

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• One's knowledge and experience are definitely limited and there are seldom more than two or three enterprises at any given time in which I personally feel myself entitled to put full confidence.

  John Maynard Keynes

  Two, Three, Given

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• If only one word is to be used to describe what Baupost does, that word should be: 'Mispricing'. We look for mispricing due to over-reaction.

  Seth Klarman

  Looks, Doe, Reactions

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• A few major opportunities, clearly recognizable as such, will usually come to one who continuously searches and waits, with a curious mind, loving diagnosis involving multiple variables. And then all that is required is a willingness to bet heavily when the odds are extremely favorable, using resources available as a result of prudence and patience in the past.

  Charlie Munger

  Past, Opportunity, Odds

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• Here's one truth that perhaps your typical investment counselor would disagree with: if you're comfortably rich and someone else is getting richer faster than you by, for example, investing in risky stocks, so what?! Someone will always be getting richer faster than you. This is not a tragedy.

  Charlie Munger

  Tragedy, Typical, Example

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• You've got to have models in your head and you've got to array you experience - both vicarious and direct - onto this latticework of mental models.

  Charlie Munger

  Vicarious, Models, Direct

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• Hard work, honesty, if you keep at it, will get you almost anything.

  Charlie Munger

  Honesty, Hard Work, Ifs

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• At Baupost, we constantly ask: 'What should we work on today?' We keep calling and talking. We keep gathering information. You never have perfect information. So you work, work and work. Sometimes we thumb through ValuLine. How you fill your inbox is very important.

  Seth Klarman

  Talking, Perfect, Important

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• I have a motto: it's never too late to give up. It's never too late to give up what you are doing, and start doing what you realise you love.

  Hans Rosling

  Giving Up, Too Late, Motto

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• Whenever you do any one thing intensely over a period of time you have to give up other lives you could be living. You have to have a real single-minded kind of tunnel vision if you want to get anything significant accomplished. Especially if the desire is not to be a businessman, but to be a creative person.

  Steve Jobs

  Giving Up, Real, Tunnels

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• There is no possibility of failure because you only control your actions and they only influence the probable evolution of your life over stochastic future paths. There is no failure, only feedback.

  Arthur De Vany

  Path, Action, Evolution

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• We rarely use much debt and, when we do, we attempt to structure it on a long-term fixed rate basis. We will reject interesting opportunities rather than over-leverage our balance sheet. This conservatism has penalized our results but it is the only behavior that leaves us comfortable, considering our fiduciary obligations to policyholders, depositors, lenders and the many equity holders who have committed unusually large portions of their net worth to our care.

  Warren Buffett

  Opportunity, Interesting, Long

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• In the end, alchemy, whether it is metallurgical or financial, fails. A base business can not be transformed into a golden business by tricks of accounting or capital structure. The man claiming to be a financial alchemist may become rich. But gullible investors rather than business achievements will usually be the source of his wealth.

  Warren Buffett

  Men, Alchemist, May

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• You really don't need leverage in this world much. If you're smart, you're going to make a lot of money without borrowing. I've never borrowed a significant amount of money in my life. Never. Never will. I've got no interest in it.

  Warren Buffett

  Smart, Would Be, Needs

  "Warren Buffett’s big life lesson to students: Don’t borrow money like Donald Trump" by Tae Kim, www.cnbc.com. April 12, 2018.

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• The financial calculus that Charlie and I employ would never permit our trading a good night's sleep for a shot at a few extra percentage points of return. I've never believed in risking what my friends and family have and need in order to pursue what they don't have and don't need.

  Warren Buffett

  Good Night, Sleep, Order

  Warren Buffett (2009). “Warren Buffett on Business: Principles from the Sage of Omaha”, p.198, John Wiley & Sons

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• The risk of an investment is described by both the probability and the potential amount of loss. The risk of an investment-the probability of an adverse outcome-is partly inherent in its very nature. A dollar spent on biotechnology research is a riskier investment than a dollar used to purchase utility equipment. The former has both a greater probability of loss and a greater percentage of the investment at stake.

  Seth Klarman

  Loss, Risk, Dollars

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• In the financial markets, however, the connection between a marketable security and the underlying business is not as clear-cut. For investors in a marketable security the gain or loss associated with the various outcomes is not totally inherent in the underlying business; it also depends on the price paid, which is established by the marketplace. The view that risk is dependent on both the nature of investments and on their market price is very different from that described by beta.

  Seth Klarman

  Cutting, Loss, Views

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• Unlike return, however, risk is no more quantifiable at the end of an investment that it was at its beginning. Risk simply cannot be described by a single number. Intuitively we understand that risk varies from investment to investment: a government bond is not as risky as the stock of a high-technology company. But investments do not provide information about their risks the way food packages provide nutritional data.

  Seth Klarman

  Technology, Government, Data

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• Rather, risk is a perception in each investor's mind that results from analysis of the probability and amount of potential loss from an investment. If an exploratory oil well proves to be a dry hole, it is called risky. If a bond defaults or a stock plunges in price, they are called risky. But if the well is a gusher, the bond matures on schedule, and the stock rallies strongly, can we say they weren't risky when the investment after it is concluded than was known when it was made.

  Seth Klarman

  Loss, Oil, Risk

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• There are only a few things investors can do to counteract risk: diversify adequately, hedge when appropriate, and invest with a margin of safety. It is a precisely because we do not and cannot know all the risks of an investment that we strive to invest at a discount. The bargain element helps to provide a cushion for when things go wrong.

  Seth Klarman

  Safety, Risk, Elements

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• Projections are put together by people who have an interest in a particular outcome, have a subconscious bias, and its apparent precision makes it fallacious. They remind me of Mark Twain's saying, 'A mine is a hole in the ground owned by a liar.' Projections in America are often a lie, although not an intentional one, but the worst kind because the forecaster often believes them himself.

  Charlie Munger

  Liars, Lying, Believe

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• We would do best in a market where everyone acted foolishly.

  Warren Buffett

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• When they get their ego involved, people do things they shouldn't do.

  Warren Buffett

  People, Ego, Involved

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• Your health is a long-range investment that will pay-off when you need it most.

  Bryant H. McGill

  Long, Needs, Pay

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• We live in a time of instant everything, courtesy of the electronic highway. It creates a community of toddlers. When they don't get immediate gratification, they get petulant and sulky.

  Faye Kellerman

  Community, Sulky, Toddler

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