Investing is serious business! While a multitude of investors have participated in the financial/stock markets through time, only a few are remembered for their outstanding success and contributions to the great foundation, and what we know today of the “art” and “science” of investing.
These great investors and traders tamed bull and bear markets, mastered their ever-present biases (emotions), and their legendary insights can teach all of us something about how to create wealth, succeed in the investment world, and in life!
Below are some of the greatest investment lessons and quotes of all time.
Warren Buffett
Business Magnate, Investor, Philanthropist, and Chairman/CEO of Berkshire Hathaway. His writings include – The Essays of Warren Buffett: Lessons For Corporate America.
“You’re dealing with a lot of silly people in the marketplace; it’s like a great big casino and everyone else is boozing. If you can stick with Pepsi, you should be O.K.”
“We’ve long felt that the only value of stock forecasters is to make fortune tellers look good. Even now, Charlie and I continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grown-ups who behave in the market like children.”
“In a bull market, one must avoid the error of the preening duck that quacks boastfully after a torrential rainstorm, thinking that its paddling skills have caused it to rise in the world. A right-thinking duck would instead compare its position after the downpour to that of the other ducks on the pond.”
“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.
“Wide diversification is only required when investors do not understand what they are doing.”
“Long ago, Ben Graham taught me that ‘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.”
“You don’t need to have a high IQ in the investment business, but you do need emotional control.”
“The difference between successful people and very successful people is that very successful people say ‘no’ to almost everything.”
“Wall Street makes its money on activity. You make your money on inactivity.”
“Remember that the stock market is a manic depressive.”
“Calling someone who trades actively in the market an investor is like calling someone who repeatedly engages in one-night stands a romantic.”
“When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap out-sized profits, not the clients. Both large and small investors should stick with low-cost index funds.”
“Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.”
“Do not save what is left after spending, but spend what is left after saving.”
“If past history was all there was to the game, the richest people would be librarians.”
“The stock market is a device for transferring money from the impatient to the patient.”
“Only buy something that you’d be perfectly happy to hold if the market shut down for ten years.”
“Rule #1: Never lose money. Rule #2: Never forget rule #1.”
“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.”
“I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.”
Benjamin Graham
Investor, Economist, and Professor. Popularly known as the “father of value investing.” His writings include: Security Analysis and The Intelligent Investor.
“The underlying principles of sound investment should not alter from decade to decade, but the application of these principles must be adapted to significant changes in the financial mechanisms and climate.”
“If you are shopping for common stocks, choose them the way you would buy groceries, not the way you would buy perfume.”
“Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.”
“To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks. ”
“In the short run, the market is a voting machine, but in the long run it is a weighing machine.”
“Buy not on optimism, but on arithmetic.”
“As in roulette, same is true of the stock trader, who will find that the expense of trading weights the dice heavily against him.”
“The margin of safety is always a function of the price paid. It will be large at one price, small at some higher price, and non-existent and some still higher price.”
“The function of the margin of safety is, in essence, that of rendering unnecessary an accurate estimate of the future.”
“There are two requirements for success in Wall Street. One, you have to think correctly; and secondly, you have to think independently.”
“The individual investor should act consistently as an investor and not as a speculator.”
“The investor’s chief problem and even his worst enemy is likely to be himself.”
Peter Lynch
Investor, Mutual Fund Manager, and Philanthropist. Former manager of Fidelity’s popular Magellan Fund. His writings include: One up on Wall Street and Beating the Street.
“If you’re prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won’t get bored.”
“Behind every stock is a company. Find out what it’s doing.”
“Twenty years in this business convinces me that any normal person using the customary three percent of the brain can pick stocks just as well, if not better, than the average Wall Street expert.”
“Know what you own, and know why you own it.”
“If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.”
“If you’re prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won’t get bored.”
“In the long run, it’s not just how much money you make that will determine your future prosperity. It’s how much of that money you put to work by saving it and investing it.”
“Know what you own, and know why you own it.”
“The real key to making money in stock market is not to get scared out of them.”
“Although it’s easy to forget sometimes, a share is not a lottery ticket. It’s part ownership of a business.”
“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. Investing in stocks is an art, not a science, and people who’ve been trained to rigidly quantify everything have a big disadvantage. If stock-picking could be quantified, you could rent time on the nearest Cray computer and make a fortune. But it doesn’t work that way. All the math you need in the stock market you get in the fourth grade.”
“I’m always fully invested. It’s a great feeling to be caught with your pants up.”
“Long-term investing has gotten so popular, it’s easier to admit you’re a crack addict than to admit you’re a short-term investor.”
Jesse Livermore
Investor and Legendary Stock Trader. He was popularly referred to as the “Boy Plunger” or “The Great Bear of Wall Street.” Books about Jesse Livermore include: Reminiscences of A Stock Trader and How To Trade in Stocks.
“At long as a stock is acting right, and the market is right, do not be in a hurry to take profits. One should never permit speculative ventures to run into investments.”
“Markets are never wrong – opinions often are.”
“The market does not beat them. They beat themselves, because though they have brains they cannot sit tight.”
“The average man doesn’t wish to be told that it is a bull or a bear market. What he desires is to be told specifically which particular stock to buy or sell. He wants to get something for nothing. He does not wish to work. He doesn’t even wish to have to think.”
“There is only one side to the stock market; and it is not the bull side or the bear side, but the right side”
“If I buy stocks on Smith’s tip I must sell those same stocks on Smith’s tip. I am depending on him. Suppose Smith is away on a holiday when the selling time comes around?
A man must believe in himself and his judgement if he expects to make a living at this game. That is why I don’t believe in tips.”
“A prudent speculator never argues with the tape. Markets are never wrong, opinions often are.”
“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.”
John Bogle
Investor, Business Magnate, and Philanthropist. Founder of The Vanguard Group. His writings include: Common Sense on Mutual Funds and The Little Book of Common Sense Investing.
“To earn the highest of returns that are realistically possible, you should invest with simplicity.”
“Lower costs are the handmaiden of higher returns.”
” The boom and the bust were normal—just two more swings in stock returns over the past century. Reversion to the mean is the iron rule of the financial markets.”
“Time is your Friend, Impulse is your Enemy.”
“If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks.”
“Don’t look for the needle in the haystack. Just buy the haystack!”
“The mutual fund industry has been built, in a sense, on witchcraft.”
“Buying funds based purely on their past performance is one of the stupidest things an investor can do.”
“The two greatest enemies of the equity fund investor are expenses and emotions.”
Charlie Munger
Investor, Businessman, and Philanthropist. Vice Chairman of Berkshire Hathaway. Some books about Charles Munger include – Poor Charlie’s Almanack: The Wit and Wisdom of Charles T. Munger and Seeking Wisdom: From Darwin to Munger.
“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.”
“Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world.”
“All intelligent investing is value investing – acquiring more that you are paying for. You must value the business in order to value the stock.”
I think we have one big advantage. A lot of other people are trying to be brilliant, and we’re just trying to stay rational … Trying to be brilliant is dangerous, particularly when gambling.
“The big money is not in the buying and selling, but in the waiting.”
“We have a passion for keeping things simple.”
“All intelligent investing is value investing – acquiring more that you are paying for. You must value the business in order to value the stock.”
John Templeton
Investor, Banker, Fund Manager, and Philanthropist. Books include Templeton Plan: 21 Steps To Personal Success and Real Happiness and Investing the Templeton Way.
“The only investors who shouldn’t diversify are those who are right 100% of the time.”
“The four most dangerous words in investing are: ‘This time it’s different.'”
“An investor who has all the answers doesn’t even understand the questions. Success is a process of continually seeking answers to new questions.”
“Bull markets are born on pessimism, grown on skepticism, mature on optimism and die on euphoria”
Other Great Investing Quotes
“Markets can remain irrational longer than you can remain solvent.” — John Maynard Keynes
“Invest in yourself. Your career is the engine of your wealth.” — Paul Clitheroe
“Most investors want to do today what they should have done yesterday.”– Larry Summers
“The broker said the stock was “poised to move.” Silly me, I thought he meant up.” –Randy Thurman
“Never trust a stockbroker under the age of 60. “– David R. Wommack
“Successful investing is anticipating the anticipations of others.” — John Maynard Keynes
“The markets are unforgiving, and emotional trading always results in losses.” — Alexander Elder
“October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” — Mark Twain
“The whole secret to winning big in the stock market is not to be right all the time, but to lose the least amount possible when you’re wrong.” — William J. O’Neil
“No profession requires more hard work, intelligence, patience, and mental discipline than successful speculation.” — Robert Rhea
“There are old traders and there are bold traders, but there are very few old, bold traders.” — Ed Seykota
“When an investor focuses on short-term investments, he or she is observing the variability of the portfolio, not the returns – in short, being fooled by randomness.” — Nassim Nicholas Taleb
“Buy when everyone else is selling and hold when everyone else is buying. This is not merely a catchy slogan. It is the very essence of successful investments.” — Jean Paul Getty
“If investing is entertaining, if you’re having fun, you’re probably not making money. Good investing is boring.” — George Soros
“When buying shares, ask yourself, would you buy the whole company?” — Rene Rivkin
“We need to stop pretending that we can divine the future, and instead concentrate on understanding the present, and preparing for the unknown.” — James Montier
“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” — Paul Anthony Samuelson
“If you’re saving, you’re succeeding.” — Steve Burkholder
“The stock market is filled with individuals who know the price of everything, but the value of nothing.” — Philip Fisher
“Every once in a while, the market does something so stupid it takes your breath away.” — Jim Cramer
“How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.” — Robert G. Allen
“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” — Albert Einstein
“An investment in knowledge always pays the best interest.” — Benjamin Franklin
“If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.” — George Soros
Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas. — Paul Samuelson
“Value investing is at its core the marriage of a contrarian streak and a calculator.” — Seth Klarman
“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
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This one from John Bogle is great…
“Time is your Friend, Impulse is your Enemy.”
Never read that one before.