The Best Investment Quotes – Part 1

Page 1 of 2

While I certainly believe there are core principles upon which sound investments are made, it’s equally clear that, like snowflakes, no two investing strategies are exactly alike. Equally talented and accomplished investors can view the landscape of investment opportunity in precisely the opposite way. The strategy that best fits my personality is value investing combined with some simple but essential technical analysis tools.

BERKSHIRE HATHAWAYThe differences in strategy and style among value investors are many: Some invest primarily in small-cap stocks while others stick to large-caps; some invest overseas while others stick to U.S. markets; some run concentrated portfolios, while others are more diversified; some are activists while others never are; some are long only, while others actively short. The list goes on. At the same time, several fundamental characteristics tend to unite value investors as well.

In this series of posts I offer this collection of wisdom classified in specific fundamental investing topics:

Finding an Edge

Efficient Markets

So if the entire country became securities analysts, memorized Benjamin Graham’s Intelligent Investor and regularly attended Warren Buffett’s annual shareholder meetings, most people would, nevertheless, find themselves irresistibly drawn to hot initial public offerings, momentum strategies and investment fads. People would still find it tempting to day-trade and perform technical analysis of stock charts. A country of security analysts would still overreact. In short, even the best-trained investors would make the same mistakes that investors have been making forever, and for the same immutable reason – that they cannot help it.

Seth Klarman, 3.23.05

Human beings are subject to wild swings in their levels of fear, risk tolerance and greed. That won’t change. I base my whole approach on buying when others are fearful and selling when others are greedy. The reason Shakespeare is so relevant still today is that his plays were all about human nature, and human nature never changes.

Mark Sellers, 6.19.05

“Humans have a strong desire to be part of a group,” says Legg Mason equity strategist Michael Mauboussin in a 2004 research paper that dissects how investors make decisions. “That desire makes us susceptible to fads, fashions and idea contagions.”

On the behavioral-finance side, one of many inefficiencies comes from people anchoring on the past. People assume something is cheap, say, just because it hasn’t traded at such a low valuation for five or ten years. But that doesn’t matter, what matters is what will be.

Ric Dillon, 6.29.07

We always ask whether we ourselves have any competitive advantage in analyzing a particular company. Can we know the business better because no one else seems to be paying attention? Is the market’s view being distorted by some behavioral or structural bias that we don’t have?

Brian Bares, 9.30.08

Investors overreact to the latest news, which has always been the case, but I think it’s especially true today with the Internet. Information spreads so quickly that decisions get made without particularly deep knowledge about the companies involved. People also overemphasize dramatic events, often without checking the facts. It’s the classic, “Are more people killed each year by sharks or by being trampled by pigs?” type of situation – the dramatic event can get more play than it deserves. These types of overreactions are what we’re trying to take advantage of.

John Dorfman, 10.31.08

One way of dealing with information being more available is to stop playing the game and seek out securities or asset classes where there’s less information or competition.

Seth Klarman, 9.30.08

Wall Street’s view is that if you don’t make your projections, you’re a bad person. That’s because they don’t want to do the hard work of making their own projections to see if the company’s projections make sense.

Richard Pzena, 2.22.05

Wall Street sometimes gets confused between risk and uncertainty, and you can profit handsomely from that confusion. The low-risk, high-uncertainty [situation] gives us our most sought after coin-toss odds. Heads, I win; tails, I don’t lose much!

Mohnish Pabrai, 6.29.07

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!