Investing Quotes - Page 22

• If you roll dice, you know that the odds are one in six that the dice will come up on a particular side. So you can calculate the risk. But, in the stock market, such computations are bull - you don't even know how many sides the dice have!

  Nassim Nicholas Taleb

  Odds, Risk, Bulls

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• And, partly, I had found that theory-structure was a superpower in helping one get what one wanted. As I had early discovered in school wherein I had excelled without labor, guided by theory, while many others, without mastery of theory failed despite monstrous effort. Better theory I thought had always worked for me and, if now available could make me acquire capital and independence faster and better assist everything I loved.

  Charlie Munger

  School, Effort, Independence

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• 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.

  Charlie Munger

  Thinking, Understanding, Age

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• Charlie and I have a number of filters that things have to get through before we'll think about them.

  Warren Buffett

  Thinking, Numbers, Filters

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

  Charlie Munger

  Honesty, Hard Work, Ifs

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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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• The cost of performing well in bad times can be relative underperformance in good times.

  Seth Klarman

  Cost, Good Times, Bad Times

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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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• 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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• Even with a margin of safety in the investor's favor, an individual security may work out badly. For the margin guarantees only that he has a better chance for profit than for loss - not that loss is impossible. But as the number of such commitments is increased the more certain does it become that the aggregate of the profits will exceed the aggregate of the losses.

  Benjamin Graham

  Commitment, Loss, Numbers

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• Calculate a stock's price/earnings ratio yourself, using Graham's formula of current price divided by average earnings over the past three years.

  Benjamin Graham

  Past, Average, Years

  Benjamin Graham (1965). “The Intelligent Investor: A Book of Practical Counsel”, p.120, Prabhat Prakashan

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• Wall Street, with its army of brokers, analysts, and advisers funneling trillions of dollars into mutual funds, hedge funds, and private equity funds, is an elaborate fraud.

  Michael Lewis

  Wall, Army, Dollars

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

  Warren Buffett

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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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• 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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• 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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• Active management is a zero-sum game before cost, and the winners have to win at the expense of the losers.

  Eugene Fama

  Zero, Winning, Games

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• Ain't only three things to gambling: knowing the 60-40 end of the proposition, money management, and knowing yourself.

  Puggy Pearson

  Knowing, Gambling, Three

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• We've got to control our own energy. Now, not only oil and natural gas, which we've been investing in; but also, we've got to make sure we're building the energy source of the future, not just thinking about next year, but ten years from now, 20 years from now. That's why we've invested in solar and wind and biofuels, energy efficient cars.

  Barack Obama

  Thinking, Years, Wind

  Source: www.realclearpolitics.com

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• If the governments devalue the currency in order to betray all creditors, you politely call this procedure 'inflation'.

  George Bernard Shaw

  Government, Order, Currency

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• If you invested in a very low cost index fund - where you don't put the money in at one time, but average in over 10 years -you'll do better than 90% of people who start investing at the same time.

  Warren Buffett

  Average, Years, People

  Berkshire Hathaway Annual Meeting, 2004.

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