Precaution

Before you attempt to beat the odds, make sure you can survive the odds beating you.

Dr. Lawrence “Larry” Kersten – American sociologist and author (1933-2006), Quotations book 2017

Long-term

The longer the time horizon, the better the performance is likely to be.

Louis A. “Lou” Simpson – American investor (b. 1936), Quotations book 2017

Courage for the unpopular

Take advantage of the high rate of analyst forecast error by simply investing in out-of-favour stocks.

David N. Dreman – Canadian investor, founder and Chairman Dreman Value management (b. 1936),
in “Contrarian Investment Strategies: The Next Generation”, rule 10 (1998), Quotations book 2017

Investment Success

The unfortunate reality is that investment success cannot be captured in a mathematical equation or a computer program.

Seth A. Klarman – American investor, president and CEO: The Baupost Group, LLC (b. 1957), from “Margin of Safety: Risk-Averse Value Investing Strategies for the Thoughtful Investor” (2000)

Niche

Most leading brokers cannot spare the time and money to research smaller stocks. You are therefore more likely to find a bargain in this relatively under-exploited area of the stock market.

James D. “Jim” Slater – British entrepreneur and investor (1929-2015), from “The Zulu Principle: Making Extraordinary Profits from Ordinary Shares” (1992)

Valor

Do you really like a particular stock? Put 10 percent or so of your portfolio on it. Make the idea count. … Good [investment] ideas should not be diversified away into meaningless oblivion.

William H. “Bill” Gross – American Fonds Manager and company founder (b. 1944), from “Everything You’ve Heard About Investing Is Wrong! How to Profit in the Coming Post-Bull Markets” (1997), Quotations book 2016

Long-term

If everything you do needs to work on a three-year time horizon, then you’re competing against a lot of people. But if you’re willing to invest on a seven-year time horizon, you’re now competing against a fraction of those people, because very few companies are willing to do that.

Jeffrey P. “Jeff” Bezos – American company founder: Amazon (b. 1964), Quotations book 2016

Stock market success

To make money in stocks you must have the vision to see them. The courage to buy them and the patience to hold them.

George Fisher Baker – American financier and philanthropist (1840-1931), quoted by Thomas Phelps (American stocks analyst, 1902-1992) in “100 to 1 in the Stock Market” (1972), Quotations book 2015

Time to sell

When good news about the market hits the front page of the New York Times, sell.

Bernard M. Baruch – American financier, adviser to several American presidents (1870-1965), Quotations book 2015

Intelligent investment

Investment is most intelligent, when it is most businesslike.

Benjamin Graham – born as Benjamin Großbaum, American investor and inventor of systematic stocks analysis (1894-1976), from “The Intelligent Investor” (1949), Quotations book 2015

Volatility

Stocks are much more volatile than the businesses they represent.

attributed to Robert G. Kirby – American investor (1925-2005), Quotations book 2016

Contrarian

To be better than the market, you have to sell what others are buying and the other way around.

Dr. J. B. Mark Mobius – American portfolio manager, pioneer in emerging-market investing, known as “Grand Master of Asian stocks” (b. 1936), Quotations book 2016

Investment success

Investment success will not be produced by arcane formulae, computer programs or signals flashed by the price behavior of stocks and markets. Rather 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 – American value investor, Chairman of Berkshire Hathaway (b. 1930), Quotations book 2015

Courage

With each investment you make, you should have the courage and the conviction to place at least 10 per cent of your net worth in that stock.

Warren Buffett – American value investor, Chairman of Berkshire Hathaway (b. 1930), Quotations book 2015

Bargains

If you’re going to buy the best bargains, you have to buy the things that people are selling.

Sir John Marks Templeton – British value investor and philanthropist (1912-2008), Quotations book 2014

Selection

First, you need two piles. You have to segregate businesses you can understand and reasonably predict from those you don’t understand and can’t reasonably predict. An example is chewing gum versus software. You also have to recognize what you can and can not know. Put everything you can’t understand or that is difficult to predict in one pile. That is the too hard pile.

Once you know the other pile, then its important to read a lot, learn about the industries, get background information, etc. on the companies in those piles. Read a lot of 10Ks and Qs, etc. Read about the competitors.

I don’t want to know the price of the stock prior to my analysis. I want to do the work and estimate a value for the stock and then compare that to the current offering price. If I know the price in advance it may influence my analysis..

following Warren Buffett – American value investor, Chairman of Berkshire Hathaway (b. 1930), Quotations book 2013

Measuring risk

Volatility does not measure risk. The problem is that the people who have written and taught about risk do not know how to measure risk. Beta is nice because it is mathematical, it is easy to calculate and it is wrong –past volatility does not determine the risk of investing.
In early 1980s, farmland that had gone for $2,000 an acre, went for $600 an acre. Beta shot up. I was apparently buying a riskier asset at $600 than at $2,000.

Warren Buffett – American value investor, Chairman of Berkshire Hathaway (b. 1930), Quotations book 2012

Bargains

The best bargains are not stocks whose prices are down most, but rather those stocks having the lowest prices in relation to possible earning power of future years.

Sir John Marks Templeton – British value investor and philanthropist (1912-2008), Quotations book 2011

Return on equity

The primary test of managerial economic performance is the achievement of high earnings rate on equity capital employed.

Warren Buffett – American value investor, Chairman of Berkshire Hathaway (b. 1930), Quotations book 2011

Bob Farrell’s 10 rules

1. Markets tend to return to the mean over time.
2. Excesses in one direction will lead to an opposite excess in the other direction.
3. There are no new eras – excesses are never permanent.
4. Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways.
5. The public buys the most at the top and the least at the bottom.
6. Fear and greed are stronger than long-term resolve.
7. Markets are strongest when they are broad and weakest when they narrow to a handful of blue chip names.
8. Bear Markets have three stages – sharp down – reflexive rebound – a drawn-out fundamental downtrend.
9. When all the experts and forecasts agree – something else is going to happen.
10. Bull markets are more fun than bear markets.

Robert J. “Bob” Farrell – American analyst, main analyst at Merrill Lynch 1976-1992 (1932-2017), Quotations book 2011

Cosmopolitanism

Common sense tells you that you will find more and sometimes better investment opportunities if you search everywhere in the world.

Sir John Marks Templeton – British value investor and philanthropist (1912-2008), Quotations book 2010

Speculation

Speculation…is neither illegal, immortal nor un-American. But is not a game in which Charlie and I wish to play. We bring nothing to the party, so why should we expect to take anything home?

Warren Buffett – American value investor, Chairman of Berkshire Hathaway (b. 1930), Quotations book 2010

Price and value

Share prices fluctuate more than share values.

Sir John Marks Templeton – British value investor and philanthropist (1912-2008), Quotations book 2010

Buy and sell

To buy when others are despondently selling and to sell when others are greedily buying requires the greatest fortitude and pays the greatest ultimate reward.

Sir John Marks Templeton – British value investor and philanthropist (1912-2008), Quotations book 2010

Courage

Similarly, in the world of securities, courage becomes the supreme virtue after adequate knowledge and a tested judgment are at Hand.

Benjamin Graham – born Benjamin Großbaum, American investor and inventor of systematic stocks analysis (1894-1976), from “The Intelligent Investor” (1949)

Investing

Investing is easier than you think, but harder than it looks.

Warren Buffett – American value investor, Chairman of Berkshire Hathaway (b. 1930)

Attractive

We love owning common stocks – if they can be purchased at attractive prices. Unless, however, we see a very high probability of at least 10% pre-tax returns, we will sit on the sidelines.

Warren Buffett – American value investor, Chairman of Berkshire Hathaway (b. 1930)

Investment opportunities

Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause the stock to be misappraised.

Warren Buffett – American value investor, Chairman of Berkshire Hathaway (b. 1930)

Successful stock

If a business does well, the stock eventually follows.

Warren Buffett – American value investor, Chairman of Berkshire Hathaway (b. 1930)

Broker not partner

If you think you can dance in and out of stocks I want to be your broker not your partner.

Warren Buffett – American value investor, Chairman of Berkshire Hathaway (b. 1930)

Invest in Businesses

The basic ideas of investing are to look at stocks as businesses, use market fluctuations to your advantage and seek a margin of safety. That’s what Ben Graham taught us… A hundred years from now they will still be the cornerstones of investing.

Warren Buffett – American value investor, Chairman of Berkshire Hathaway (b. 1930)

Wall Street

Wall Street hasn’t really changed all that much. It still operates on the principle of taking care of itself first, really big and important customers second, everyone else last.

Allan Sloan – American journalist (b. 1944), in “Lessons of the crash of ’08”, Fortune Magazine, September 28th 2009

Margin of Safety

We are not paid by our customers to hold stocks without a margin of safety.

Amit Wadhwaney – American fund manager (b. 1953)

Wall Street

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 – American value investor, Chairman of Berkshire Hathaway (b. 1930), Quotations book 2007

Purchasing patterns

I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years..

Warren Buffett – American value investor, chairman of Berkshire Heathaway (b. 1930), Quotations book 2008

Broker

Brokers know the price of everything and the value of nothing.

attributed to Philip A. Fisher – American Growth investor and mentor of Warren Buffett (1907-2004)

Long-term-performance

We focus not on the performance of our stocks on the short run but on the performance of our business.

Stockholder’s slogan

Obedient stockholders

The typical American stockholder is the most docile and apathetic animal in captivity. He does what the board of directors tell him to do and never thinks of asserting his individual rights as owner of the business and employer of its paid officers.

Benjamin Graham – born Benjamin Großbaum, American investor and inventor of systematic stocks analysis (1894-1976)

Selection

It is only occasionally that there is any reason for selling (carefully selected stocks) at all.

Philip A. Fisher – Growth-Investor and mentor of Warren Buffett (1907-2004), Quotations book 2007

Investment strategy

Whenever you sell a stock, thinking it will go down, somebody else has to buy it, thinking it will go up. One of you is wrong – every time. That’s why you always have to think about, if and why you are on the right side of the trade. An that is why you have to start with a systematic search strategy and not with coincidence.

Bruce C. Greenwald – American professor for finance and asset managemant (*1946), Quotations book 2007

Mutual Funds

There was only one place to make money in the mutual fund business – as there is only one place for a temperate man to be in a saloon, behind the bar and not in front of it… so I invested in a management company.

Paul A. Samuelson – American economist, Nobel-Memorial Prize in economic sciences 1970 (1915-2009), Quotations book 2007

Long-term investments

More fortunes are made by sitting on good securities for years at a time than by active trading.

Philip L. Carret – American investor, founder of Pioneer Fund (1896-1998), Quotations book 2005

Holding period

How long should you hold a stock? As long as the good things that attracted you to the company are still there.

Philip L. Carret – American investor, founder of Pioneer Fund (1896-1998), Quotations book 2005

Equity participation

I don’t have sense enough to figure out when to go into cash, so we’re always fully invested in stocks.

Philip L. Carret – American Investor and founder of Pioneer Fund (1896-1998), Quotations book 2005

Wrong objective

Don’t chase performance – you will always be late.

Perry J. Kaufman – American financial theorist, investment-expert and author (b. 1943)

Buying Stocks

Buy stocks that are difficult to buy.

Experienced investor’s rule of thumb