Our Favorite Quotes on Value, Investing, and Life  

 

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"I'm convinced that there is much inefficiency in the market... When the price of a stock can be influenced by a "herd" on Wall Street with prices set at the margin by the most emotional person, or the greediest person, or the most depressed person, it is hard to argue that the market always prices rationally. In fact, market prices are frequently nonsensical."

Warren Buffett


"The big money is not in individual fluctuations, but in the main movements.
That is, not in reading the tape but in sizing up the entire market and its trend."

Jesse Livermore
"Reminiscences of a Stock Operator"

 

“Diversification is a protection against ignorance. It makes very little sense for those who know what they’re doing.”

Warren Buffett

 

"Individuals who cannot master their emotions are ill-suited to profit from the investment process."

Benjamin Graham
Considered the 'Father of Value Investing' and author of 'The Intelligent Investor' and 'Security Analysis'


 

"Out of the crooked timber of humanity, no straight thing was ever made."

Immanuel Kant

 

“Faced with the choice between changing one’s mind and proving that there is no need to do so,
almost everyone gets busy on the proof.”

John Kenneth Galbraith

 

"Many shall be restored that are now fallen and many shall fall that now are held in honor."

"Ars Poetica," Horace
Used as the first-page inscription in the great Graham and Dodd value-investing tome, 'Security Analysis' – reflecting the fact that capitalism works and causes struggling companies to find a path to resurgence, while high-flying winners are frequently overcome by competition, waste, or hubris.

 

"Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria."

Sir John Templeton


“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 value-investing 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
Billionaire founder of the Baupost Group hedge fund and author of "Margin of Safety"



"Investment markets follow a pendulum-like swing between euphoria and depression, between celebrating positive developments and obsessing over negatives, and thus between overpriced and underpriced. There are a few things of which we can be sure, and this is one: Extreme market behavior will reverse. Those who believe the pendulum will move in one direction forever – or reside in extreme forever – eventually will lose huge sums. Those who understand the pendulum's behavior can benefit enormously.”

Howard Marks
Co-founder, Oaktree Capital


"(Deeply undervalued companies) are there. You don’t have to find too many. Finding 10 of these opportunities in your lifetime will make you so rich. But you can’t be wrong. You can’t have any zeroes. A list of big numbers multiplied by zero will equal zero. You can’t go back to 'Go.'”

Warren Buffett



"A stock is not just a ticker symbol or an electronic blip; it is ownership interest in an actual business,
with an underlying value that does not depend on its share price.
"

Benjamin Graham
Considered the 'Father of Value Investing' and author of 'The Intelligent Investor' and 'Security Analysis'

 


"Don't you see what's happening? Potter isn't selling; Potter's buying!
And why? Because we're panicking and he's not!"

Jimmy Stewart
Potter had a value-investing philosophy at the depths of the Great Depression, from the classic holiday movie, "It's a Wonderful Life"

 

 

"Our investment style has been given a name - 'focus investing' - which implies ten holdings, not one hundred or four hundred. The idea that it is hard to find good investments, so concentrate in a few, seems to me to be an obvious idea. But 98% of the investment world does not think this way. It's been good for us."

Charlie Munger
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.

 

“There is a tide in the affairs of men which, when taken at the flood, leads to fortune."

William Shakespeare

 

“Patience is not an absence of action; rather it is timing. It waits on the right time to act."

Fulton J. Sheen


"Free riding on price signals isn't a bug of capitalism to be exploited by those greedy red indexers; rather, the use of price signals by those who played no role in setting them may be capitalism's most important feature."

Cliff Asness


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“Speculation is dealing with the uncertain conditions of the unknown future.
Every human action is a speculation in that it is embedded in the flux of time.”

Ludwig von Mises

 

“You want to enter into incipient trends, exit with discipline when those trends fail,
and remain with winning trends for long periods.”

Michael W. Covel
Author of "Trend Following: Learn to Make Millions in Up or Down Markets"

 

"The stock market is a mechanism for transferring wealth from the impatient to the patient."

Warren Buffett

 

 

“All of human unhappiness comes from one single thing: not knowing how to remain at rest in a room."
Blaise Pascal

 

“The time to buy is when there is blood in the streets.”

Nathan Rothschild
18th century British nobleman and member of the Rothschild banking family

 

"It's always helpful to learn from your mistakes because then your mistakes seem worthwhile."

Garry Marshall
(1934–July 19, 2016)
Writer, director, actor. Creator of Happy Days, Laverne and Shirley, The Odd Couple and more

 

“You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with the 130 IQ.”

Warren Buffett



"The stock investor is neither right or wrong because others agreed or disagreed with him;
he is right because his facts and analysis are right."

Benjamin Graham
Considered the 'Father of Value Investing' and author of 'The Intelligent Investor' and 'Security Analysis'

“This is worse than divorce. I have lost half my money and still have a wife."

—Anonymous (for obvious reasons)


"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

 


“Chaos is the law of nature; Order is the dream of man.”

Henry Adams
20th century historian and author

 

“Impossible is just a big word thrown around by small men who find it easier to live in the world they’ve been given than to explore the power they have to change it. Impossible is not a fact. It’s an opinion. Impossible is not a declaration. It’s a dare. Impossible is potential. Impossible is temporary. Impossible is nothing.”

Muhammad Ali
1942 - 2016

 

“Beware the investment activity that produces applause; the great moves are usually greeted by yawns.”

Warren Buffett

 

"I can't change the direction of the wind, but I can adjust
my sails to always reach my destination."


Jimmy Dean



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"Prediction is very difficult, especially if it's about the future."

Nils Bohr, physicist

 

"Investing without research is like playing stud poker and never looking at the cards."

Peter Lynch


"To have a true investment, there must be a true margin of safety.  And a true margin of safety is one that can be demonstrated by figures, by persuasive reasoning, and by reference to a body of actual experience."

Benjamin Graham
Considered the 'Father of Value Investing' and author of 'The Intelligent Investor' and 'Security Analysis'


 

“Value strategies yield higher returns because these strategies exploit suboptimal behavior of the typical investor and not because these strategies are fundamentally riskier.”  

—Josef Lakonishok, Andrie Shleifer, and Robert Vishny,
"Contrarian Investment, Extrapolation, and Risk"

 

 

"You can observe a lot by watching."

Yogi Berra

 

 

"Speculators are obsessed with predicting: guessing the direction of stock prices.  Every morning on cable television, every afternoon on the stock market report, every weekend in Barron’s, every week in dozens of market newsletters, and whenever business people get together.  In reality, no one knows what the market will do; trying to predict it is a waste of time, and investing based upon that prediction is a purely speculative undertaking."

Seth Klarman
Billionaire founder of the Baupost Group and author of "Margin of Safety"

 

 

"I conceive that the great part of the miseries of mankind are brought upon them by
false estimates they have made of the value of things."

Benjamin Franklin

 

"It's not supposed to be easy. Anyone who finds it (investing) easy, is stupid."

Charlie Munger
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.

 

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

Mark Twain

 

"It is better to be roughly right than precisely wrong."

John Maynard Keynes

 

“Investing Rule #1: Never Lose Money;

Investing Rule #2: Never forget Rule #1.”

Warren Buffett

 

"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

 

"When the capital development of a country becomes the by-product of the activities of a casino,
the job is likely to be ill-done."

John Maynard Keynes

 

“If you didn’t get the deferred-gratification gene, you’ve got to
work very hard to overcome that.”

Charles Munger
Berkshire-Hathaway Co-Chairman, in a 2014 interview

 

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"Whenever you find yourself on the side of the majority, it is time to pause and reflect."


Mark Twain

 

"I started out with nuthin. Still got most of it left."

SeaSick Steve

"An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative."

Benjamin Graham
Considered the 'Father of Value Investing' and author of 'The Intelligent Investor' and 'Security Analysis'

 

“Losing money is the least of my troubles. A loss never troubles me after I take it. I forget it overnight. But being wrong – not taking the loss – that is what does the damage to the pocket book and to the soul.”

Jesse Livermore

 

"In investing, what is comfortable is rarely profitable."

Robert Arnott


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"I conceive that the great part of the miseries of mankind are brought upon them
by false estimates they have made of the value of things."

Benjamin Franklin

“The less prudence with which others conduct their affairs,
the greater the prudence with which we should conduct our own affairs.”

Warren Buffett

“The President cannot make clouds to rain and cannot make the corn to grow, he cannot make business good; although when these things occur, political parties claim credit for the good things that have happened.”

—William Howard Taft
American 27th US President  from 1909-1913


“Faced with the choice between changing one’s mind and proving that there is no need to do so,
almost everyone gets busy on the proof.”


John Kenneth Galbraith

"What the wise man does in the beginning, the fool does in the end."

Warren Buffett

 

"The stock market is filled with individuals who know the price of everything, but the value of nothing."

Philip Fisher
"Common Stocks and Uncommon Profits"



"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


"Get your facts first, and then you can distort them as you please.”

Mark Twain

 

Bufett on Patience:

"I buy on the assumption they could close the market the next day and not reopen it for five years."

"Much success can be attributed to inactivity. Most investors cannot resist the
temptation to constantly buy and sell."

Warren Buffett

 

"How many millionaires do you know who have become wealthy by investing in savings accounts?"

Robert G. Allen


“I trade on my own information and follow my own methods.”

Jesse Livermore

 

"The years teach much which the days never know."

Ralph Waldo Emerson

"As Buffett has often observed, value investing is not a concept that can be learned and gradually applied over time. It is either absorbed and adopted at once, or it is never truly learned."

Seth Klarman
Billionaire founder of the Baupost Group and author of "Margin of Safety"

 

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"A stock operator has to fight a lot of expensive enemies within himself."

Jesse Livermore

 

"I can calculate the movement of the stars, but not the madness of men."

Sir Isaac Newton



 

"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. There must be some wisdom in the folk saying: 'It's the strong swimmers who drown.'"

Charlie Munger
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.

 

“Convictions are more dangerous enemies of truth than lies.”

Friedrich Nietzsche

 

Ominous quote by the man who pursued, and then inspired in his successors, the manipulation of markets higher, which resulted in the huge bubbles and busts of the late 20th and early 21st centuries:

"I don't know where the stock market is going, but I will say this, that if it continues higher, this will do more to stimulate the economy than anything we've been talking about today or anything anybody else is talking about."

Alan Greenspan, Federal Reserve Chairman, 1987-2006

 

"Markets can remain irrational far longer than you can remain solvent."

John Maynard Keynes

 

“The most difficult thing is the decision to act, the rest is merely tenacity.”

Amelia Earhart


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"Most investors think of the stock market like a casino, where the spins of the wheel are completely outside their control, whereas it’s actually like poker, where we are all betting against each other."

—James Montier
"Behavioural Finance: Insights Into Irrational Minds and Markets"

 

"Most people get interested in stocks when everyone else is. The time to
get interested is when no one else is. You can’t buy what is popular and do well."

Warren Buffett

 

“The desire for constant action irrespective of underlying conditions is responsible for many losses on Wall Street, even among the professionals, who feel that they must take home some money every day, as though they were working for regular wages.”

Jesse Livermore

 

"Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world."

Charlie Munger
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.

 

“People should be highly skeptical of anyone's, including their own, ability to predict the future, and instead pursue strategies that can survive whatever may occur. [Nassim] Taleb advises us to be “anti-fragile” – i.e., to embrace those elements that benefit from volatility, variability, stress and disorder.  This is exactly what we strive to do."

Seth Klarman
Billionaire founder of the Baupost Group and author of "Margin of Safety"

 

 

“The four most expensive words in the English language are "this time is different.”  

Sir John Templeton

 

"We don't have to be smarter than the rest. We have to be more disciplined than the rest."

Warren Buffett

 

“Never trust the experts."

John F. Kennedy


“The individual investor should act consistently as an investor and not as a speculator. This means that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money’s worth for his purchase.”

Benjamin Graham
Considered the 'Father of Value Investing' and author of 'The Intelligent Investor' and 'Security Analysis'


 

"Successful investors tend to be unemotional, allowing the greed and fear of others to play into their hands. By having confidence in their own analysis and judgement, they respond to market forces not with blind emotion but with calculated reason."

Seth Klarman
Billionaire founder of the Baupost Group and author of "Margin of Safety"

“I believe that anyone who is intelligent, conscientious, and willing to put in the necessary time can be successful on Wall Street. As long as they realize the market is a business like any other business, they have a good chance to prosper.”

Jesse Livermore

 

"We don't get paid for activity, just for being right. As to how long we'll wait, we'll wait indefinitely."

Warren Buffett

 

"Where we have strong emotions, we're liable to fool ourselves."
 
Carl Sagan
American astronomer, cosmologist, astrophysicist, first science popularizer and communicator and author of "Cosmos"

 

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“The investor’s chief problem—and even his worst enemy—is likely to be himself.”

Benjamin Graham
Considered the 'Father of Value Investing' and author of 'The Intelligent Investor' and 'Security Analysis'


 

"Charlie and I have a number of filters that things have to get through before we'll think about them.  We really can say no in 10 seconds or so to 90%+ of all the things that come along simply because we have these filters.”

Warren Buffett


“I've found that prophesying is one of life's less profitable occupations."

Abraham Lincoln

 

“If you are shopping for common stocks, choose them the way you would buy groceries,
not the way you would buy perfume.”

Benjamin Graham
Considered the 'Father of Value Investing' and author of 'The Intelligent Investor' and 'Security Analysis''


 

“In a narrow market, when prices are not getting anywhere to speak of but move within a narrow range, there is no sense in trying to anticipate what the next big movement is going to be. The thing to do is to watch the market, read the tape to determine the limits of the get-nowhere prices, and make up your mind that you will not take an interest until the prices break through the limit in either direction.”

Jesse Livermore

 

“It was never my thinking that made the big money. It was always my sitting. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money.”

Jesse Livermore

 

"In the short run, the market is a voting machine, a product partly of reason and partly of emotion.
But in the long run it is a weighing machine."

Benjamin Graham
Considered the 'Father of Value Investing' and author of 'The Intelligent Investor' and 'Security Analysis'

 

“Based on my own personal experience – both as an investor in recent years and an expert witness in years past – rarely do more than three or four variables really count. Everything else is noise."

Marty Whitman
Co-Chief Investment Officer of Third Avenue Funds Management

 

"An investor will succeed by coupling good business judgment with an ability to insulate his thoughts and behavior from the super-contagious emotions that swirl about the marketplace."

Warren Buffett

 

“Individual and institutional investors alike frequently demonstrate an inability to make long-term investment decisions based on business fundamentals.”

Seth Klarman
Billionaire founder of the Baupost Group and author of "Margin of Safety"


 

“My satisfaction always came from beating the market, solving the puzzle. The money was the reward, but it was not the main reason I loved the market. The stock market is the greatest, most complex puzzle ever invented – and it pays the biggest jackpot…it was never the money that drove me. It was the game, solving the puzzle, beating the market that had confused and confounded the greatest minds in history. For me, that passion, the juice, the exhilaration was in beating the game, a game that was a living dynamic riddle…”

Jesse Livermore

 

“Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.”

Benjamin Graham
Considered the 'Father of Value Investing' and author of 'The Intelligent Investor' and 'Security Analysis'



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“Good judgment comes from experience, and a lot of that comes from bad judgment.”

Will Rogers

 

“The focus of most investors differs from that of value investors. Most investors are primarily oriented toward return, how much they can make and pay little attention to risk, i.e., how much they can lose.”  

Seth Klarman
Billionaire founder of the Baupost Group and author of "Margin of Safety"

 

“If it’s close, we don’t play.”

Benjamin Graham
Considered the 'Father of Value Investing' and author of 'The Intelligent Investor' and 'Security Analysis'


 

“What beat me was not having the brains enough to stick to my own game – that is, to play the market only when I was satisfied that precedents favored my play.”

Jesse Livermore

 

"Look at market fluctuations as your friend rather than your enemy;
profit from folly rather than participate in it."

Warren Buffett

 

"In investing, what is comfortable is rarely profitable."

Robert Arnott

 

'MR. MARKET'

"Imagine that in some private business you own a small share that cost you $1,000. One of your partners, named Mr. Market, is very obliging indeed. Every day he tells you what he thinks your interest is worth and furthermore offers either to buy you out or to sell you an additional interest on that basis. Sometimes his idea of value appears plausible and justified by business developments and prospects as you know them. Often, on the other hand, Mr. Market lets his enthusiasm or his fears run away with him, and the value he proposes seems to you a little short of silly."

"If you are a prudent investor or a sensible businessman, will you let Mr. Market's daily communication determine your view of the value of a $1,000 interest in the enterprise? Only in case you agree with him, or in case you want to trade with him. You may be happy to sell out to him when he quotes you a ridiculously high price, and equally happy to buy from him when his price is low. But the rest of the time you will be wiser to form your own ideas of the value of your holdings, based on full reports from the company about its operations and financial position."

"The true investor is in that very position when he owns a listed common stock. He can take advantage of the daily market price or leave it alone, as dictated by his own judgment and inclination. He must take cognizance of important price movements, for otherwise his judgment will have nothing to work on. Conceivably they may give him a warning signal which he will do well to heed—this in plain English means that he is to sell his shares because the price has gone down, foreboding worse things to come.

In our view such signals are misleading at least as often as they are helpful. Basically, price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal. At other times he will do better if he forgets about the stock market and pays attention to his dividend returns and to the operating results of his companies."

Summary

"The most realistic distinction between the investor and the speculator is found in their attitude toward stock-market movements. 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. Market movements are important to him in a practical sense, because they alternately create low price levels at which he would be wise to buy and high price levels at which he certainly should refrain from buying and probably would be wise to sell."

source: The Intelligent Investor by Benjamin Graham, 4th Revised Edition

 

“Learning about investing from books is like learning about sex from romance novels.”

Charlie Munger
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.


 

“Never make predictions, especially about the future.”

Casey Stengel
Legendary manager of the New York Yankees

 

 

"Successful Investing takes time, discipline and patience. No matter how great the talent or effort, some things just take time: You can't produce a baby in one month by getting nine women pregnant."

Warren Buffett

 

"Value investing is risk aversion."

Seth Klarman
Billionaire founder of the Baupost Group and author of "Margin of Safety"

 




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“I think you have to learn that there’s a company behind every stock, and that there’s only one real reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.”

Peter Lynch

 

"I will tell you how to become rich. Close the doors.
Be fearful when others are greedy.  Be greedy when others are fearful."

Warren Buffett

 

"Value investing is at its core the marriage of a contrarian streak and a calculator."

Seth Klarman
Billionaire founder of the Baupost Group and author of "Margin of Safety"

 

 

"For some reason, people take their cues from price action rather than from values. What doesn’t work is when you start doing things that you don’t understand or because they worked last week for somebody else.  The dumbest reason in the world to buy a stock is because it’s going up."

Warren Buffett

 

“The game of life is the game of everlasting learning. At least it is if you want to win.”

Charlie Munger
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.

 

"It is better to be roughly right than precisely wrong."

John Maynard Keynes

 

"In our view, though, investment students need only two well-taught courses - How to Value a Business, and How to Think about Market Prices. Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily-understandable business who's earnings are virtually certain to be materially higher five, ten and twenty years from now."

Warren Buffett

 

"Experience has proved to me that real money made in speculating has been in commitments in a stock or commodity showing a profit right from the start.”

Jesse Livermore

 

"All intelligent investing is value investing -- acquiring more that you are paying for. You must value the business in order to value the stock."

Charlie Munger
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.

 


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"Interestingly, we have beaten the market quite handsomely over this time frame, although beating the market has never been our objective. Rather, we have consistently tried not to lose money and, in doing so, have not only protected on the downside but also outperformed on the upside."

Seth Klarman
Billionaire founder of the Baupost Group and author of "Margin of Safety"

 

 

"You can sell (your company) to Berkshire, and we'll put it in (the equivalent of) the Metropolitan Museum of Art (MET); it'll have a wing all by itself; it'll be there forever.  Or you can sell it to some porn-shop operator, and he'll take the painting and he'll make the boobs a little bigger and he'll stick it up in the window, and some other guy will come along in a raincoat, and he'll buy it."

Warren Buffet
(On what makes individuals/companies sell their business to Berkshire Hathaway.)

 

“Doubt is not a pleasant condition, but certainty is absurd.”

Voltaire

 

 

"The strategy we've adopted precludes our following standard diversification dogma. Many pundits would therefore say the strategy must be riskier than that employed by more conventional investors. We disagree. We believe that a policy of portfolio concentration may well decrease risk if it raises, as it should, both the intensity with which an investor thinks about a business and the comfort-level he must feel with its economic characteristics before buying into it."

Warren Buffett

 

"Value investing is the discipline of buying securities at a significant discount from their current underlying values and holding them until more of their value is realized. The element of a bargain is the key to the process.”

Seth Klarman
Billionaire founder of the Baupost Group and author of "Margin of Safety"

 

 

“We believe that almost all really good investment records will involve relatively little diversification. The basic idea is that it is hard to find good investments, but you want to be in good investments. Therefore, that you should just find a few of them that you knew a lot about and concentrate on those seemed to me such an obviously good idea. And indeed, it’s proven to be an obviously good idea. Yet 98% of the investing world doesn’t follow it. That’s been good for us.”

Charlie Munger
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.

 

 

“As time goes on, I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. It is a mistake to think that one limits one’s risk by spreading too much between enterprises about which one knows little and has no reason for special confidence….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

 

“An argument is made that there are just too many question marks about the near future; wouldn’t it be better to wait until things clear up a bit? You know the prose: “Maintain buying reserves until current uncertainties are resolved,” etc. Before reaching for that crutch, face up to two unpleasant facts: The future is never clear and you pay a very high price for a cheery consensus. Uncertainty actually is the friend of the buyer of long-term values.”

Warren Buffett


"If you are not confused about the economy, you don’t understand it.”

Charlie Munger
Berkshire Hathaway Annual Meeting 2013

 

"Cash combined with courage in a time of crisis is priceless."

Warren Buffett

 

“The only way you get a real education in the market is to invest cash, track your trade, and study your mistakes…. The examination of a losing trade is tortuous but necessary to ensure that it will not happen again.”

Jesse Livermore

 

“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

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“If only one word is to be used to describe what Baupost (hedge fund) does, that word should be: 'Mispricing'. We look for mispricing due to over-reaction.”

Seth Klarman
Billionaire founder of the Baupost Group and author of "Margin of Safety"

"Unless you can watch your stock holding decline by 50% without becoming panic-stricken,
you should not be in the stock market."

Warren Buffett

 

"Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it."

Will Rogers


“We work really hard never to get confused with what we know from what we think or hope or wish.”

Seth Klarman
Billionaire founder of the Baupost Group and author of "Margin of Safety"

 


“The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.”

William Arthur Ward

 

"Out of clutter, find simplicity. From discord, find harmony. In the middle of difficulty lies opportunity."

Albert Einstein

 

 

“To achieve long-term success over many financial market and economic cycles, observing a few rules is not enough. Too many things change too quickly in the investment world for that approach to succeed. It is necessary instead to understand the rationale behind the rules in order to appreciate why they work when they do and don't when they don't.”

Seth Klarman
Billionaire founder of the Baupost Group and author of "Margin of Safety"

 

“In my opinion, there are two key concepts that investors must master: value and cycles. For each asset you’re considering, you must have a strongly held view of its intrinsic value. When its price is below that value, it’s generally a buy. When its price is higher, it’s a sell. In a nutshell, that’s value investing.

But values aren’t fixed; they move in response to changes in the economic environment. Thus, cyclical considerations influence an asset’s current value. Value depends on earnings, for example, and earnings are shaped by the economic cycle and the price being charged for liquidity.

Further, security prices are greatly affected by investor behavior; thus we can be aided in investing safely by understanding where we stand in terms of the market cycle. What’s going on in terms of investor psychology, and how does it tell us to act in the short run? We want to buy when prices seem attractive. But if investors are giddy and optimism is rampant, we have to consider whether a better buying opportunity mightn’t come along later.”

Howard Marks
Co-founder, Oaktree Capital Management

 

“Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future.”

Warren Buffett

 

"I have no data yet. It is a capital mistake to theorise before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts."

Arthur Conan Doyle
Author, The Adventures of Sherlock Holmes

 

“Price is what you pay; value is what you get. Whether we’re talking about socks or stocks,
I like buying quality merchandise when it is marked down.”

Warren Buffett

 

"You cannot ignore the market – ignoring a source of investment opportunities would obviously be a mistake –
but you must think for yourself and not allow the market to direct you."


Seth Klarman
Billionaire founder of the Baupost Group and author of "Margin of Safety"

 

 

"Investors should remember that excitement and expenses are their enemies.         

Warren Buffett

 

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“Life is not about waiting for the storm to pass, it is about learning to dance in the rain.”

—Unknown

 

“Discovery is looking at what everyone else sees, and seeing what everyone else misses.”

Kauffman Foundation

 

“Don't be astonished at new ideas; you know it does not cease to be true because it is not accepted by many.”

Baruch Spinoza

 

"The stock market is filled with individuals who know the price of everything, but the value of nothing."

Phillip Fisher
American investor and author of "Common Stocks and Uncommon Profits"

 

“The first principle is that you must not fool yourself, and you are the easiest person to fool.”

Richard Feynman
American theoretical physicist known for his work in the path integral formulation of quantum mechanics

 

"The chains of habit are too light to be felt until they are too heavy to be broken."

Warren Buffett

 

“The minute you get away from the fundamentals – whether it’s proper technique, work ethic, or mental preparation – the bottom can fall out of your game, your schoolwork, your job, whatever you’re doing.”

Michael Jordan

 

“If you’re not confused about the economy, you don’t understand it very well.”

Charlie Munger
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.

 

ON EFFORT

“Plough deep, while sluggards sleep, and you shall have corn to sell and keep. Work while it is called today, for you know not how much you may be hindered tomorrow. One today is worth two tomorrows, and Never leave that till tomorrow, which you can do today.”

“If you were a servant, would you not be ashamed that a good master should catch you idle? Are you then your own master? Be ashamed to catch yourself idle when there is so much to be done for yourself, your family, and your country. Handle your tools without mittens: Remember, that the cat in gloves catches no mice.”

“It is true, there is much to be done, and perhaps, you are weak handed; but stick to it steadily, and you will see great effects; for Constant dropping wears away stones; and by diligence and patience the mouse ate in two the cable; and little strokes fell great oaks.”

Ben Franklin

 

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"In the business world, the rearview mirror is always clearer than the windshield." 

Warren Buffett

 

"Try not to become a man of success, but rather try to become a man of VALUE." 

Albert Einstein


“Acquire riches by industry and Frugality.”

Ben Franklin

 

“Your life must focus on the maximization of objectivity."

Charlie Munger
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.

 

“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
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.

 

 

If a business does well, the stock eventually follows."

Warren Buffett

 

“You need to have a passionate interest in why things are happening. That cast of mind, kept over long periods, gradually improves your ability to focus on reality. If you don’t have that cast of mind, you’re destined for failure even if you have a high I.Q.”

Charlie Munger
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.

 

"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
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.

 

“He is a wise man who does not grieve for the things which he has not, but rejoices for those which he has.”

Epictetus
Greek Stoic philosopher

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"Once you adopt a value-investment strategy, any other investment behaviour
starts to seem like gambling."


Seth Klarman
Billionaire founder of the Baupost Group and author of "Margin of Safety"

 

“You’ve got to have models in your head and you’ve got to array your experience – both vicarious and direct – onto this latticework of mental models.”

Charlie Munger
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.


"I have found that stock markets are harder to kill than roaches."

Arthur Levitt

 

“Acquire worldly wisdom and adjust your behavior accordingly.
If your new behavior gives you a little temporary unpopularity with your peer group… then to hell with them.”

Charlie Munger
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.

 

"In my whole life, I have known no wise people who didn't read all the time -- none, zero. You'd be amazed at how much I read. My children laugh at me. They think I'm a book with a couple of legs sticking out."

Charlie Munger
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.

 

"Warren and I insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think. So Warren and I do more reading and thinking and less doing than most people in business."

Charlie Munger
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.

 

“The man who doesn’t read good books has no advantage over the man who can’t read them.”

Mark Twain

 

“Not everything that counts can be counted, and not everything that can be counted counts.”

Albert Einstein

 

"Most of what we say and do is not essential. If you can eliminate it, you'll have more time, and more tranquility. Ask yourself at every moment, 'Is this necessary?"

Marcus Aurelius
Roman Emperor 161-180

 

"The definition of insanity is doing something over and over again and expecting different results."

Albert Einstein

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“Everything should be made as simple as possible, but not simpler.”

Albert Einstein

 

“If I have seen further [than certain other men] it is by standing upon the shoulders of giants.”

Sir Isaac Newton

 

“If I am anything, which I highly doubt, I have made myself so by hard work.”

Sir Isaac Newton

 

“The harder you work the luckier you get.”

Ben Franklin

 

"More important than the will to win is the will to prepare."

Charlie Munger
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.

 

“In all things success depends on previous preparation,
and without such previous preparation there is sure to be failure”

Confucius

 

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

Charlie Munger
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.

 

"Plans are only good intentions unless they immediately degenerate into hard work."

Peter Drucker

 

"Determine never to be idle. No person will have occasion to complain of the want of time who never loses any. It is wonderful how much may be done if we are always doing."

Thomas Jefferson

 

"I have been speculating...what makes a man a discoverer of undiscovered things, and a most perplexing problem it is. Many men who are very clever, -- much cleverer than discoverers -- never originate anything. As far as I can conjecture, the art consists in habitually searching for causes or meaning of everything which occurs. This implies sharp observation and requires as much knowledge as possible of the subject investigated."

Charles Darwin

 

"Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway."

Warren Buffett


"The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him."

Leo Tolstoy

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“It is impossible to begin to learn that which one thinks one already knows.”

Epictetus

 

“In times of change, learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists.”

Eric Hoffer

 

"I have always thought that one man of tolerable abilities may work great changes, and accomplish great affairs among mankind if he first forms a good plan and, cutting off all amusements or other employments that would divert his attention, makes the execution of that same plan his sole study and business."

Ben Franklin

 

“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
Billionaire founder of the Baupost Group and author of "Margin of Safety"

 

 

"You can become, to an enormous degree, the person you want to be."

Warren Buffett

 

“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

 

Successful investors, demonstrate caution in frothy markets and steadfast conviction in panicky ones. Indeed, the very way an investor views the market and it’s price fluctuations is a key factor in his or her ultimate investment success or failure."

Seth Klarman
Billionaire founder of the Baupost Group and author of "Margin of Safety"

 

 

“The content of your character is your choice. Day by day, you choose what you think, and what you do is who you become. Your integrity is your destiny… it is the light that guides your way.”

Heraclitus


“Doubt is not a pleasant condition, but certainty is absurd.”

Voltaire

 

 

"When I was 17 I read a quote that went something like "If you live each day as if it was your last, someday you'll most certainly be right." It made an impression on me, and since then, for the past 33 years, I have looked in the mirror every morning and asked myself, "If today were the last day of my life, would I want to do what I am about to do today?" And whenever the answer has been "no" for too many days in a row, I know I need to change something. Remembering that I'll be dead soon is the most important thing I've ever encountered to help me make the big choices in life, because almost everything — all external expectations, all pride, all fear of embarrassment or failure — these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart."

Steve Jobs
Founder, Apple, Inc., 1955-2011


 

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“Complex systems don't have causes. There are just patterns and at any point one's life can move randomly onto a new path. It is not the particular path that one should think about. You move over an ensemble of possible paths, conditional on how you live and the choices you make. All you can do is to try to influence the distribution of possibilities. You can never set the particular path or outcome that will be yours from this time forward. If you think you can look back and see some cause of events, you are probably suffering hindsight bias or what I call complexity blindness.

Think of the freedom this view gives you. 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.”

Art De Vany
American economist

 


Warren Buffett on Debt:


"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."

"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.”

"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. The other reason is I never thought I would be way happier when I had 2X instead of X. You ought to have a good time all the time as you go along.”

Warren Buffett

 


“While some might mistakenly consider value investing a mechanical tool for identifying bargains, it is actually a comprehensive investment philosophy that emphasizes the need to perform in-depth fundamental analysis, pursue long-term investment results, limit risk, and resist crowd psychology.”

Seth Klarman
Billionaire founder of the Baupost Group and author of "Margin of Safety"

 

 

"We have two kinds of forecasters, those who don't know and those who don't know they don't know."

John Kenneth Galbraith

 

"It is frightening to think that you might not know something, but more frightening to think that by and large the world is run by people who have faith that they know exactly what is going on."

Amos Tversky
A leader in the discovery of systematic human cognitive bias and handling of risk

 

"It ain't what you don't know that gets you into trouble. It what you know for certain that just ain't true."

Mark Twain

 

“There is a great difference between knowing and understanding: you can know a lot about something and not really understand it.”

Charles F. Kettering


“Value investors look at cash flows. If a company can maintain present cash flows for 5 or 6 years, it’s a good investment. Investors then just hope that those cash flows—and thus the company’s value—don’t decrease faster than they anticipate.”

Peter Thiel

 

"The harder you work, the more confidence you get. But you may be working hard on something that is false."

Charlie Munger
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.

 

“He is a foolish swimmer who swims against the stream, when he might take the current sideways.”

Ovid

 

“To avoid the various foolish opinions to which mankind are prone, no superhuman genius is required.  A few simple rules will keep you, not from all error, but from silly error.”

Bertrand Russell

 

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“There is a master key to success with which no man can fail.  Its name is simplicity.  Simplicity, I mean, in the sense of reducing to the simplest possible terms every problem that besets us. Whenever I have met a business proposition which, after taking thought, I could not reduce to simplicity, I have left it alone.”

Henri Deterding


"The financial calculus that Charlie (Munger) 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

 

“The time of maximum pessimism is the best time to buy
and the time of maximum optimism is the best time to sell.”


Sir John Templeton

 

“Risk is not inherent in an investment; it is always relative to the price paid. Uncertainty is not the same as risk. Indeed, when great uncertainty – such as in the fall of 2008 – drives securities prices to especially low levels, they often become less risky investments.”

Seth Klarman
Billionaire founder of the Baupost Group and author of "Margin of Safety"

 

 

FAMOUS QUOTES ON SIMPLICITY:

"We have a passion for keeping things simple."

Charlie Munger
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.

 

"It's amazing how many people even today use a computer
to do something you can do with a pencil and paper in less time."

—Physicist Richard Feynman (from No Ordinary Genius)

 

"The art of being wise is the art of knowing what to overlook."

William James
the "Father of American psychology"

 

"Part of that [having uncommon sense], I think, is being able to tune out folly, as distinguished from recognizing wisdom. You've got whole categories of things you just bat away so your brain isn't cluttered with them. That way, you're better able to pick up a few sensible things to do."

Charlie Munger
Co-CEO, with Warren Buffett, of Berkshire Hathaway, Inc.

 

“The ability to simplify means to eliminate the unnecessary so that the necessary may speak.”

Hans Hofmann

 

“There never was a sounder logical maxim of scientific procedure than Ockham’s razor: 'Entia non sunt multiplicanda praeter necessitatem.' That is to say; before you try a complicated hypothesis, you should make quite sure that no simplification of it will explain the facts equally well.”

Charles Sanders Pierce

 

“Order and simplification are the first steps toward the mastery of a subject.”

Thomas Mann

 

“A theory is the more impressive the greater the simplicity of its premises,
the more different kinds of things it relates, and the more extended its area of applicability.”

Albert Einstein

 

“Everything must be made as simple as possible, but no simpler.”

Albert Einstein

 

"Any intelligent fool can make things bigger, more complex, and more violent.
It takes a touch of genius—and a lot of courage —to move in the opposite direction."

E. F. Schumacher, internationally influential economic thinker, statistician, and economist


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