Investing Quotes - Page 24

• The stock market resembles a huge laundry in which institutions take in large blocks of each others washing ... without rhyme or reason.

  Benjamin Graham

  Block, Laundry, Reason

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• We say we are trying to buy into businesses with excellent economics, run by honest and able people at a decent price. We buy very few securities, so we look at it as "focused" investing.

  Warren Buffett

  Running, People, Trying

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• If you know how to value businesses, it's crazy to own 50 stocks or 40 stocks or 30 stocks, probably because there aren't that many wonderful businesses understandable to a single human being in all likelihood. To forego buying more of some super-wonderful business and instead put your money into #30 or #35 on your list of attractiveness just strikes Charlie and me as madness.

  Warren Buffett

  Crazy, Buying, Lists

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• To suppose that safety-first consists in having a small gamble in a large number of different companies where I have no information to reach a good judgment, as compared with a substantial stake in a company where one's information is adequate, strikes me as a travesty of investment policy.

  John Maynard Keynes

  Numbers, Safety, Different

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• Diversification is something that stock brokers came up with to protect themselves, so they wouldn't get sued for making bad investment choices for clients. Henry Ford never diversified, Bill Gates didn't diversify. The way to get rich is to put your eggs in one basket, but watch that basket very carefully. And make sure you have the right basket.

  Jim Rogers

  Eggs, Choices, Watches

  "Jim Rogers: Diversification Is A Scam" by John Carney, www.businessinsider.com. April 16, 2009.

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• We try to exert a Ted Williams kind of discipline. In his book The Science of Hitting, Ted explains that he carved the strike zone into 77 cells, each the size of a baseball. Swinging only at balls in his "best" cell, he knew, would allow him to bat .400; reaching for balls in his "worst" spot, the low outside corner of the strike zone, would reduce him to .230. In other words, waiting for the fat pitch would mean a trip to the Hall of Fame; swinging indiscriminately would mean a ticket to the minors.

  Warren Buffett

  Baseball, Book, Mean

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• ... but the important thing is that when you do find one where you really do know what you are doing, you must buy in quantity.... Charlie and I have made a dozen or so very big decisions relative to net worth, although not as big as they should have been. And in each of those, we've known that we were almost certain to be right going in.

  Warren Buffett

  Should Have, Decision, Important

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• As a result of overdiversification, their (active managers) returns get watered down. Diversification covers up ignorance. Active managers haven't done enough research into any of their companies. If managers have 200 positions, do you think they know what's going on at any one of those companies at this moment?

  Bill Ackman

  Ignorance, Thinking, Cover Ups

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• We're non-diversified. We focus. Why not buy more of your best idea rather than your 60th best idea? How many companies can I really know well over time and focus on, on a daily basis?

  Bruce Berkowitz

  Ideas, Focus, Why Not

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• Diversification is a surrogate - and a damn poor surrogate - for knowledge, elements of control, and priceconsciousness.

  Martin J. Whitman

  Elements, Poor, Damn

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• Our marketable equities tell us by their operating results - not by their daily, or even yearly, price quotations - whether our investments are successful. The market may ignore business success for a while, but eventually will confirm it.

  Warren Buffett

  Successful, Business Success, May

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• It is the long term investor who will in practice come in for the most criticism. For it is the essence of his behaviour that he should be eccentric, unconventional and rash in the eyes of the average opinion. If he is successful, that will only confirm the general belief in his rashness; and if in the short run he is unsuccessful, which is very likely, he will not receive much mercy. Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.

  John Maynard Keynes

  Running, Independent, Eye

  1936 The General Theory of Employment, Interest and Money.

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• Active management strategies demand uninstitutional behavior from institutions, creating a paradox that few can unravel. Establishing and maintaining an unconventional investment profile requires acceptance of uncomfortably idiosyncratic portfolios, which frequently appear downright imprudent in the eyes of conventional wisdom.

  David F. Swensen

  Independent, Eye, Acceptance

  David F. Swensen (2009). “Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment, Fully Revised and Updated”, p.8, Simon and Schuster

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• That what's most relevant to you is whether and how you're doing something different from what everybody else is doing.

  Roger G. Ibbotson

  Independent, Thinking, Different

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• All economic movements, by their very nature, are motivated by crowd psychology.

  Bernard Baruch

  Psychology, Movement, Crowds

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• The idea that a bell rings to signal when investors should get into or out of the stock market is simply not credible. After nearly fifty years in this business, I do not know of anybody who has done it successfully and consistently. I don't even know anybody who knows anybody who has done it successfully and consistently. Yet market timing appears to be increasingly embraced by mutual fund investors and the professional managers of fund portfolios alike.

  John C. Bogle

  Years, Ideas, Done

  John C. Bogle (2010). “Common Sense on Mutual Funds”, p.28, John Wiley & Sons

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• We are convinced that the intelligent investor can derive satisfactory results from pricing of either type (market timing or fundamental analysis via price). We are equally sure that if he places his emphasis on timing, in the sense of forecasting, he will end up as a speculator and with a speculator's financial results." And "The speculator's primary interest lies in anticipating and profiting from market fluctuations. The investor's primary interest lies in acquiring and holding suitable securities at suitable prices.

  Benjamin Graham

  Lying, Intelligent, Analysis

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• One of the ironies of the stock market is the emphasis on activity. Brokers, using terms such as 'marketability' and 'liquidity,' sing the praises of companies with high share turnover... but investors should understand that what is good for the croupier is not good for the customer. A hyperactive stock market is the pick pocket of enterprise.

  Warren Buffett

  Pockets, Irony, Praise

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• Move only when you have an advantage. It's very basic. You have to understand the odds and have the discipline to bet only when the odds are in your favor.

  Charlie Munger

  Moving, Odds, Discipline

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• In a world in which most investors appear interested in figuring out how to make money every second and chase the idea du jour, there's also something validating about the message that it's okay to do nothing and wait for opportunities to present themselves or to pay off. That's lonely and contrary a lot of the time, but reminding yourself that that's what it takes is quite helpful.

  Seth Klarman

  Lonely, Opportunity, Ideas

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• As Graham, Dodd and Buffett have all said, you should always remember that you don't have to swing at every pitch. You can wait for opportunities that fit your criteria and if you don't find them, patiently wait. Deciding not to panic is still a decision.

  Seth Klarman

  Opportunity, Swings, Decision

  "Channeling Graham and Dodd: A Conversation with Seth Klarman". Value Investor Insight Interview, seekingalpha.com. October 29, 2008.

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• The essence of investment management is the management of risks, not the management of returns.

  Benjamin Graham

  Essence, Risk, Return

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• It is the duty of the long-term investor to endure great losses with equanimity.

  John Maynard Keynes

  Loss, Long, Equanimity

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• Learn how to ignore the examples from others when they are wrong, because few skills are more worth having.

  Charlie Munger

  Skills, Example

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• The art of investment has one characteristic that is not generally appreciated. A creditable, if unspectacular, result can be achieved by the lay investor with a minimum of effort and capability; but to improve this easily attainable standard requires much application and more than a trace of wisdom. If you merely try to bring just a little extra knowledge and cleverness to bear upon your investment program, instead of realizing a little better than normal results, you may well find that you have done worse.

  Benjamin Graham

  Art, Effort, Trying

  Benjamin Graham (2009). “The Intelligent Investor, Rev. Ed”, p.9, Harper Collins

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