Furthering the tradition of bringing the wisdom of words, Words Worth brings to you the words of 20 renowned businessmen and investors. From value investors like Ben Graham and Warren Buffett to traders like Jesse Livermore, to all-rounder stock pickers like Peter Lynch, to businessmen like Ray Dalio, to motivational speaker Bob Farell, to money manager Barton Biggs, the wisdom presented below comes from diverse sources. Not only does it come from diverse sources, it is also vibrant and could be even contradictory, thus highlighting the difference in approaches of the speakers. Given that everyone below has proved his/her mettle in his field, the wisdom is worth assimilating. Even if you don't agree upfront, you can still have multiple perspectives of looking at the same thing.
"Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful."
"The stock market is filled with individuals who know the price of everything, but the value of nothing."
"Investing without research is like playing stud poker and never looking at the cards."
"It is absurd to think that the general public can ever make money out of market forecasts."
"For all long-term investors, there is only one objective - maximum total real return after taxes."
"If investing is entertaining, if you're having fun, you're probably not making any money. Good investing is boring."
"It's not always easy to do what's not popular, but that's where you make your money. Buy stocks that look bad to less careful investors and hang on until their real value is recognized."
Thomas Rowe Price Jr
"Every business is manmade. It is a result of individuals. It reflects the personalities and the business philosophy of the founders and those who have directed its affairs throughout its existence. If you want to have an understanding of any business, it is important to know the background of the people who started it and directed its past and the hopes and ambitions of those who are planning its future."
"We have bloated bureaucracies in Corporate America. The root of the problem is the absence of real corporate democracy."
"By far the biggest problem for professionals in investing is dealing with career and business risk: protecting your own job as an agent. The second curse of professional investing is over-management caused by the need to be seen to be busy, to be earning your keep. The individual is far better-positioned to wait patiently for the right pitch while paying no regard to what others are doing, which is almost impossible for professionals."
"Play the market only when all factors are in your favor. No person can play the market all the time and win. There are times when you should be completely out of the market, for emotional as well."
"Quantitatively based solutions and asset allocation equations invariably fail as they are designed to capture what would have worked in the previous cycle whereas the next one remains a riddle wrapped in an enigma."
"You can't develop a portfolio strategy around endless possibilities. You wouldn't even get out of bed if you considered everything that could possibly happen... You can use history as one tool for shaping reasonable probabilities. Then, you look at the world of economic, sentiment and political drivers to determine what's most likely to happen-while always knowing you can be and will be wrong a lot."
"The average long-term experience in investing is never surprising, but the short-term experience is always surprising. We now know to focus not on rate of return, but on the informed management of risk."
"The market does reflect the available information, as the professors tell us. But just as the funhouse mirrors don't always accurately reflect your weight, the markets don't always accurately reflect that information. Usually they are too pessimistic when it's bad, and too optimistic when it's good."
"The public buys the most at the top and the least at the bottom." And, "When all the experts and forecasts agree - something else is going to happen."
"If you don't have integrity, you have nothing. You can't buy it. You can have all the money in the world, but if you are not a moral and ethical person, you really have nothing."
"If you have trouble imaging a 20 per cent loss in the stock market, you shouldn't be in stocks."
"An economy is simply the sum of the transactions that make it up. A transaction is a simple thing. Because there are a lot of them, the economy looks more complex than it really is. If instead of looking at it from the top down, we look at it from the transaction up, it is much easier to understand."
"Smart investing doesn't consist of buying good assets but of buying assets well. This is a very, very important distinction that very, very few people understand."