It only takes a handful of big winners to make a lifetime of investing worthwhile.
An important key to investing is to remember that stocks are not lottery tickets.
Investing in stocks is an art, not a science, and people who've been trained to rigidly quantify everything have a big disadvantage.
When stocks are attractive, you buy them. Sure, they can go lower. I've bought stocks at $12 that went to $2, but then they later went to $30. You just don't know when you can find the bottom.
Just because you buy a stock and it goes up does not mean you are right. Just because you buy a stock and it goes down does not mean you are wrong.
Hold no more stocks than you can remain informed on.
Invest in what you know.
I've always said, the key organ here isn't the brain, it's the stomach. When things start to decline - there are bad headlines in the papers and on television - will you have the stomach for the market volatility and the broad-based pessimism that tends to come with it?
What makes stocks valuable in the long run isn't the market. It's the profitability of the shares in the companies you own. As corporate profits increase, corporations become more valuable and sooner or later, their shares will sell for a higher price.
In this business if you're good, you're right six times out of ten. You're never going to be right nine times out of ten.
The best stock to buy is the one you already own.
There's no use diversifying into unknown companies just for the sake of diversity. A foolish diversity is the hobgoblin of small investors. That said, it isn't safe to own just one stock, because in spite of your best efforts, the one you choose might be the victim of unforeseen circumstances. In small portfolios, I'd be comfortable owning between three and ten stocks.
Never invest in any idea you can't illustrate with a crayon
The stock market really isn't a gamble, as long as you pick good companies that you think will do well, and not just because of the stock price.
Charts are great for predicting the past.
As I look back on it now, it's obvious that studying history and philosophy was much better preparation for the stock market than, say, studying statistics.
Stocks are a safe bet, but only if you stay invested long enough to ride out the corrections.
The simpler it is, the better I like it.
I can't recall ever once having seen the name of a market timer on Forbes' annual list of the richest people in the world. If it were truly possible to predict corrections, you'd think somebody would have made billions by doing it.
The Rule of 72 is useful in determining how fast money will grow. Take the annual return from any investment, expressed as a percentage, and divide it into 72. The result is the number of years it will take to double your money.
My method for picking stocks has never changed. When businesses go from crappy to semicrappy, there's money to be made.
You can't see the future through a rearview mirror
Long shots almost always miss the mark.
Invest in businesses any idiot could run, because someday one will.
During the Gold Rush, most would-be miners lost money, but people who sold them picks, shovels, tents and blue-jeans (Levi Strauss) made a nice profit.
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