Simon Gordon
Active member
- Messages
- 126
- Likes
- 1
Hello :cheesy:
These are quotes taken from share investing books I have read. If you have a good quote why not add it to the thread.
Enjoy!
STOCK MARKET WISDOM
Speculart - ‘Latin’ - means to spy out and observe.
He will buy only good businesses with good management and good long term prospects.
Holding quality growth stocks for long periods is the most remunerative strategy for almost everybody.
Think quality. Think long term.
The really big gains in shares come over the long-term - they are the result of conspicuous absence of trading activity. Lethargy is preferable to hyperactivity. Turn off the stock market and the economy: use all that saved energy to find the best companies.
If a positive growth rate appears to be established the stock is almost certain to develop some type of following.
Business is remarkably simple:- get the right management team, cut cost, focus on the core business and get a real strategy.
A major factor that confuses novice investors is that the market anticipates future events, whereas people are designed to react to present events.
He could and did turn in a twinkling, if he found he was wrong.
Buy on the way up.
Sitting tight.
Without faith in his own judgement no man can go very far in this game.
This counsel may be the most important I can suggest: trade alone. Close your mind to the opinions of others; pay no attention to outside influences. Disregard reports, rumours, and idle board-room chatter. If you are going to trade actively and are going to employ your own judgement, then for heaven’s sake, stand or fall by your own opinions.
Figure out supply and demand and you’ll get extraordinarily rich. It’s astonishing how many people cannot grasp this.
Never argue with the tape.
Share performance is ultimately a reflection of the past progress and expected future prospects.
Analysts are supposed to be critics of corporations. They end up being public relations spokesmen for them. What a waste!
The ability to wait - wait for an existing investment to mature, wait for a potential investment to become available at a reasonable price - often demands a degree of patience which is extremely difficult to sustain in the face of contrary interim market behaviour.
Don’t lose money. If you don’t know the facts, don’t play. Something will come along where you know it’s right, then play.
Seek facts diligently; advice never.
You never make big money in the market without getting in the way of danger.
You can sometimes make 20 fold while the most you can possibly lose is 100%.
1. A sound balance sheet.
2. Satisfactory cash flow.
3. An above average return on equity.
4. Able management.
5. A satisfactory outlook for continued growth.
6. An attractive product or an attractive service.
7. A strong market in which to operate.
DISCIPLINE CONCENTRATION PATIENCE
The market is never wrong in what it does; it just is.
The market doesn’t give you money, you give it to yourself based on your ability to perceive opportunity and execute a trade.
Maxim - the market hates uncertainty.
Keep in mind that prices move in the direction of the greatest force (traders fulfilling their beliefs about the future).
Trading is very difficult, a doctor or lawyer goes to school for seven or eight years to learn his profession and then makes a little money and comes into the market expecting to win right away. Remember, trading is by far the toughest game in the world, because you’re competing against the keenest minds in the world.
Diversification is a necessity for the beginner. On the other hand the really great fortunes were made by concentration.
Concentration of investments in a minimum of stocks insures that enough time will be given to the choice of each so that every important detail about them will be known.
One of the immutable laws of investing; you have to take risks to generate rewards and the larger the risks, the greater the potential rewards.
Trading - taking money away from other traders with no services rendered.
Essential motives that drive most ambitious companies in America:
1. A desire for growth.
2. A thirst for marketplace.
3. A hunger for dominance.
Trading - 80% Psychological and 20% Methodology.
He is always searching for investments where the risks are minimised.
Diworseification.
The p/e ratio of any company that’s fairly priced will equal its growth rate of earnings.
Unless I’m confident enough in the company to buy more shares, I ought to be selling immediately.
If companies aren’t going anywhere fast, neither will the price of their stock.
A life without mistakes is a failure.
The only growth rate that really counts - earnings.
Any time you own a security, ask yourself if you would buy it today. If you wouldn’t buy it, you should consider selling it.
The market is the market. If the management doesn’t perform it is reflected in the share price.
The price of a security represents a consensus.
What you need is a crystal ball and the intuition to pick out the new growth stock, the one you can still buy ’almost for free’.
The most important fundamental influence on stock prices is the level of future growth of corporate earnings and dividends.
Picking stocks whose earnings grow is the name of the game.
Buying unrecognised growth stocks whose p/e is not any substantial premium over the market. If the growth does not materialise, damage is likely to be less severe.
Successful investing demands both intellectual and psychological acuteness.
There are three ways of making money:
1. Sell your time.
2. Lend your money.
3. Risk your money.
A growth stock - earnings went up and the dividend went up. The price went up.
The City is not a place to try to make an isolated profit. Rather it is where one goes to set up a continuing and consistent investment or speculation program.
It is the expectation of coming events, rather than the events when they materialise, that moves markets.
Bargains are the holy grail of the true stock picker.
It always was and always will be the power to understand and the ability to act that turns information into profits.
The greatest safety lies in putting all your eggs in one basket and watching the basket. You simply cannot afford to be careless or wrong. Hence you act with much more deliberation.
The best psychologists are usually the best investors. Successful investment is a matter of experience, information, and judgement and not a matter of pure fact and pure formula.
It has been my experience that the most successful investor is the one who has most of his money committed on his most successful ideas and the least amount of money on his poorest.
Never fall in love with a stock; always have an open mind.
To invest in the stock market is automatically a sign of boldness. The timid fail immediately. The simple act of buying a stock is a bold announcement: my perception of this stock is right and everyone else (who didn’t buy it) is wrong.
Growth does not just happen. It starts in the minds of management. It is a burning obsession.
Unless the Chief Executive is strong on marketing, the company is likely to stumble repeatedly over itself.
Marketing is an art form. A marketer is an artisan.
Enriching yourself in the market can be accomplished only by getting other people’s money.
Privileged information is the goal of most market players.
The forces knocking stock prices about are imbalances in buy and sell decisions.
The thoughts of millions of people concerning the prospects of the many businesses upon which our society relies are mirrored in the market quotations on the financial pages of daily newspapers. What fantastic complexity! What unfathomable, immeasurable forces underlie each of the numbers!
Be in harmony with the market.
Traders, acting in their belief in the future by putting on a trade, are the only force that can act on prices to make them move.
Prices are going to go in the direction of the greatest force.
The market is never wrong it just is.
As long as there is disagreement between individuals about the value of goods and service, prices will fluctuate, thereby creating opportunities for a trader to make money if they will assume the risks.
We are all speculators, except when we lose - then we are all gamblers.
Appreciate and learn the nitty-gritty of buying low and selling high.
Success in any endeavour requires single-minded attention to detail and total concentration.
A (speculator) must think for himself; must follow his own connections; self trust is the foundation of successful effort. (Don’t) follow the mentally lazy habit of allowing a newspaper or broker or a wise friend to do your security market thinking.
Forget about the great prices you could have traded at. Should you enter, add or exit: RIGHT NOW!
The market will always be open. Wait for a good opportunity and then barrel in.
Prices provide the information.
Speculation is an intricate dance between risk and reward.
Many deep thinkers consider the ordering and connecting of discrete data to be the fundamental organizing activity of human nature. The successful human, speculator, or otherwise, must use his ability to adapt to an ever-changing environment.
Trends last longer than expected.
Buffett tried to analyse the long term prospects of individual companies.
Buffett defined investing as an attempt to profit from the results of the enterprise, as distinct from the price action.
The most profitable strategy - long-term growth stock immobilism.
Remember that you are in a contest with yourself and not the market.
The market is an easy game to play.
Playing the market is the hardest way to make an easy living.
Flow with the market’s directions.
The market is our teacher, and it pays to listen.
The market never lies.
The river always wins. Paddle with the stream.
The perfect master is the market itself. The market speaks to us in one language - price.
You have to trade with an empty mind.
One of the wealthiest traders I knew told me it took him twenty years to get it right, and he was a fast learner.
Trust the earnings figures and nothing else.
Sound investing can make you very wealthy if you’re not in too big a hurry.
A lot of great fortunes in the world have been made by owning a single wonderful business.
Stocks are simple. All you do is buy shares in a great business for less than the business is intrinsically worth, with managers of the highest integrity and ability. Then you own those shares forever.
Continually take the high probability bets.
As a trader, professional or part-time, on-or off floor you are competing to make money with the best traders that the largest banks can find. You have to ask yourself what is your edge? How are you going to take money from the full-time professional who has been trained to do this by a team of experts and is paid to be constantly on the ball? Focus on one area, say support services companies and try to become an expert on them.
What is going to drive this stock to move?
I am out, unless I see a reason to be in the stock.
Patiently wait for the greatest reward/risk ratios.
Cultivate patience.
I think great traders certainly have to have a psychological stability about themselves but not too much stability, because one has to have a certain flair for risk.
The market has intelligence that is beyond what our minds can comprehend. The market is the accumulation of all the information that there is and the market indicates that price.
I know that if I am thinking too much about a trade, then it is time to get out.
Powerful businesses are based on strong individuals who build strong teams around ideas that matter to them.
The true speculator is one who observes the future and acts before it occurs.
The keys to success are an accurate analysis, a willingness to take risk, and the ability to act.
The more objective and the less emotionally involved you are, the more successful you tend to be.
I don’t know of a better index of a company’s success than the price of it’s stock.
The future belongs to companies that can come up with a clear and compelling vision of their market and their place in it in five years time and then transform themselves to get there first.
The more complex the information processing and the larger the amount of information to be integrated, the more complex decision making gets to be.
Analysts are supposed to be good configural reasoners, which means they are supposed to be able to take all of the disparate and changing information, put it to together, and come out with an answer.
If a stock is popular and there’s a negative surprise, the perceptions change. We call it an event trigger, but another term could just as easily be a perceptual change.
People think the worst of these unpopular stocks, but if they surprise positively, the market looks at these stocks, and perceptions change.
A good stock should have good earnings. Negative surprises for stocks for which we have high expectations are murderous.
Every investment in the stock market involves making decisions the outcome of which is unknowable and unpredictable.
Uncertainty generates anxiety, a diffuse state of tension that frequently elicits either the illusion of excessive danger or the denial of a danger that should be feared.
The ultimate danger is that the individual company will go out of business.
Fantasies of making an investment so successful that the results will change one’s life is an example of an investment flying fantasy.
Because uncertainty is endemic to the investment process, anxiety (conscious or unconscious) appears to accompany each investment decision.
My own qualities research suggests that those individuals who experience time as passing quickly have more capacity to tolerate volatility than those who experience time as passing slowly.
I believe that the deeply ingrained psychological tendency to function in herds, especially under conditions of risk, was in evolutionary time an adaptive, protective mechanism that remains a built-in part of the human psyche.
To invest successfully means that investors must go against a long and powerful evolutionary history of psychological adaptation, which has not selected them for the task.
Can I tolerate uncertainty without undue anxiety? Do I have more faith in my own judgment than in others?
Those whose greed is fuelled by archaic grandiosity tend to be a continual loser in the market, while appearing outwardly as extremely successful.
It takes time for small caps to become large caps, and therefore small-cap investing requires unusual patience to reap the benefits of the enormous upside potential of some of these companies.
Ability to correctly assess the intrinsic value of a company and the quality of its management.
Logically stocks are bought for the purpose of being sold.
Most individual investors follow no investing plan and are very much prey to their emotions.
Fear quickly takes over if the market begins to go down.
Enforced discipline and the contrarian nature.
Ben Graham had a very correct insight when he said that in the short run the market is a voting machine, but in the long run it’s a weighing machine.
Psychologists discovered years ago that human beings find it impossible to contemplate true randomness.
It’s a game of intelligence in which you pit your knowledge and common sense against others, and if your long-term analysis is correct, you win.
Investment greatness only comes to those who are willing to go out on the limb in a meaningful way.
Ignore the market. Don’t even try to guess its direction. Buy quality stocks at undervalued prices, and just hold on until those values are recognized. It does get any simpler than that.
The most important factor to allow you to let the market’s underlying simplicity shine through is to understand the importance of viewing stocks as operating businesses.
This ability to focus on the long term, more than anything else, is what will position an investor for eventual success.
It requires discipline to hold.
View this not as a stock market but strictly as a market of individual stocks.
Don’t let fear and weakness turn you, a long-term investor, into a short-term seller.
If you want to buy a stock when it is cheap, you have to go against the grain: it is cheap because most people think it should be and will stay cheap.
At big companies you talk too executives. At small companies you talk to owners.
A small company has just one or two businesses, so you can understand it.
It’s the owner who is the risk taker able to conceive and create something that can make him and those who invest in him rich.
As a company grows and prospers, it can cross the threshold of institutional interest. The ugly duckling is pronounced a swan, and its p/e ratio increases.
Warren Buffett and George Soros, two of the greatest investors of the twentieth century.
Buffett - the consummate buy-and-hold strategist.
Soros - the mercurial trader.
The great visionary investments have two primary features: the first is a powerful idea, the second is execution.
A well positioned company can get even better.
If lack of control is an issue for you, then you may need to take some non-standard steps to make the stock market a more comfortable place for you. Shareholder activism is one way: Attend the AGM. Ask questions. Do everything you can to make you feel like part of the active management process.
You want your image of the company to be what you saw on your last visit, not what you’re looking at on Bloomberg.
Leaders who slaved to see their visions become a reality, a shareholder barely has to do anything. It’s an incredible deal, when you think about it.
When Pete Sampras gives a clinic on how to serve, he doesn’t really expect that anyone in the class is going to do it as well as he can. But you or I could literally match Warren Buffett’s stock market performance.
The act of waiting, being characterised by lack of both productivity and control, is one of the most stressful things we humans can undergo.
Keep it simple and consistent.
Ignore the news media.
Clearly understand the Risk/Reward Ratio.
Speculation demands cool judgement, self-reliance, courage, pliability and prudence.
The worst losses in the market come from uninformed people buying greatly overvalued stocks.
Get accurate information. Demand facts, not opinions.
Investigate a stock thoroughly before you buy it.
Remember that it is easier to buy than sell. The saleability of a stock is very important.
The market moves up slowly, but goes down fast.
Remember that the market actually is a barometer of business and credit.
Don’t listen to or give tips.
Fortunes are not easily made in Wall Street. Some professionals give their lives to the market and die poor.
Don’t blame the stock exchange for your own mistakes.
Don’t let emotion or prejudice warp your judgement. Base your operations on facts.
Speculation is an art. The first principle of every art is to have at the outset a clear conception of the end aimed at.
Every speculator must think for himself.
Trading, speculating, or investing in the markets, then, is not a science, but an art that is carefully learned, nurtured, and practiced over a long period of time.
History tells us that it is not possible to accumulate a significant amount of money in a brief time unless you are extremely lucky.
Markets are constantly probing for the vulnerabilities and weaknesses that we all possess.
Uncontrolled tape watching or quote gathering is a sure way of losing perspective.
Tickeritis - constant need to watch the market.
Livermore was a great believer in the theory that the real news is not in the headlines but behind them.
The two most important attributes of a successful investor, Livermore said patience and knowledge.
Some of the sharpest minds have spent huge amounts of time and money in an effort to beat the markets.
If you do your homework properly, just relax and let the markets do the rest.
Stock groups move in and out fashion just like styles of clothing.
His belief that if you are right about the company and buy it at a sensible price, you will eventually see your stock appreciate.
Buy a stock only as a share in a good business that you know a lot about.
The market is totally objective, it is the participants who are emotional.
Rising prices, remember, build confidence.
When Soros believed he was right about an investment, nothing could stop him. No investment position was too large. Holding back was for wimps. The worst error in Soros’s book was not being too bold, but too conservative. ’Why so little?’ was one of his favourite questions.
His greatest key to success is his psychology. He understands the herd instinct. He understands when lots of people are going to go for something, like a good marketing man.
$250,000. That was the beginning of the Soros fortune.
The way to attain truly superior long-term returns is to grind it out until you’re up 30 to 40 percent, and then if you have the conviction, go for a 100 percent year. If you can put a few near-100 percent years and avoid down years, then you can achieve really outstanding long-term returns.
When you have tremendous conviction on a trade, you have to go for the jugular. It takes courage to be a pig. When you’re right on something, you can’t on own enough.
Buy into companies that have disciplined plans for achieving dramatic long-range growth in profits and that have inherent qualities making it difficult for newcomers to share in that growth.
There are a relatively small number of truly outstanding companies. Their shares frequently can’t be bought at attractive prices. Therefore, when favourable prices exist, full advantage should be taken of the situation.
I believe it pays to ignore near-term fluctuations in situations that hold real promise.
In the stock market a good nervous system is even more important than a good head.
Good managements, those most suitable for outstanding investment, are nearly all quite frank in answering questions about the company’s weak points as fully about its strong points.
Practical investors usually learn their problem is finding enough outstanding investments, rather than choosing among too many.
Once a stock has been properly selected and has borne the test of time, it is only occasionally that there is any reason for selling it at all.
Opportunities for attractive investments are extremely hard to find.
The company into which the investor should be buying is the company which is doing things under the guidance of exceptionally able management.
The young growth stock offers by far the greatest possibility of gain. Some times this can mount up to several thousand per cent in a decade.
A great business is one that has a readily identifiable business advantage, which is to say they do things systematically better than the competition and it shows up over and over again.
If you’re in a great company run by a great manager, you can’t imagine how far they can go.
To me identifying great companies and participating in their success over a long period of time is what investing is all about. If you go back hundreds of years it’s what merchant banks did. They went around and found really clever entrepreneurs, gave them some capital, and participated in their success. That’s all the stock market allows us to do. The beauty of it is we don’t have to run the business or manage the minutia and the detail. We just have to identify which people are going to be successful.
You want people who are smart, have a history of delivering, and communicate well.
Investing involves sifting through a lot of a data and trying to figure out what has the highest probability of succeeding.
In real estate, it’s location, location, location. In stocks, it’s quality, quality, quality.
I love inside ownership.
There’s a certain mentality, a certain optimism you must have to be a growth investor.
All the CEO’s who failed didn’t execute in the day-to-day operations. It wasn’t about vision, it was about execution.
I see myself as a big sieve. I’m catching lots of information, and I know the kinds of things I’m looking for. If I find something that looks as if it might be interesting I’ll do a lot more work on it.
The information comes out pretty fast. If you wait for print, it’s too late.
Yacktman is a big believer in equity investing, regardless of one’s age. In fact, he has a 90 year old client who has some 90% of her portfolio in stocks.
Buffett isn’t really a portfolio manager. He’s a businessman who often buys pieces of companies through the stock market.
My feeling is that the only time I feel comfortable is when I’m in stocks. Cash is the unsafe place to be. Stocks are the permanent place. That’s where the returns are.
The Samurai of feudal-era Japan was probably history’s most accomplished ‘professional risk-taker.’
You must first understand that before you can elevate your personal performance in any area, your performance must first be viewed as an art form, and that the pure objective of practicing this art is the refinement of your inner spirit and discipline and ultimately the unconditional enjoyment and appreciation of having done it as well as is currently possible.
Attention fully on the flawless execution of the act - the trade.
Trading Samurai - one who serves and protects his capital.
Your ability to live comfortably in the present moment, which of course is the only moment you have any real control of in your life.
The validity of viewing market engagement as a war game and viewing trading as warriorship.
If your beliefs or positions are such that you are willing to risk all or even die for them, then you can count on them as being valid.
Any trader worth his salt knows it is imperative to first get in sync (aiki) with the market flow.
There are two kinds of people in this world. First, there are those who follow life’s lead and spend their time and energies defending against whatever life might throw at them, then living off the leftovers of the battle. Then there are those who courageously attack life by taking advantage of every opening and opportunity that may prevent itself, thereby setting the pace of life and living off the spoils of victory.
The Samurai would never have considered going into battle to test some new technique or system of fighting before thoroughly practicing it in controlled scenarios.
The true warrior knows that he must practice his methods and techniques to a point of near-perfection before ever trying to trust them to serve him in battle. He knows that there is simply no other way besides dedicated practice to acquire enough mastery of a particular technique to honestly be able to call it an unconsciously competent skill.
The Samurai did acknowledge and experience fear. The difference between a samurai and the average man, however, was that the samurai never let fear stop them from taking action.
Accept all possible losses before entering the battle.
Study and learn about money management and the statistical nuances of the (war) games.
The more you know about a situation or an opponent, the less likely you are to become fearful or doubtful.
LAW OF EVOLUTION - creation (reality) is in a constantly evolving state of being! Thus it is imperative that you understand that, within the Law of Evolution, there exist two antithetical sub laws that have a dramatic effect on your existence: the Law of Progression and its ‘evil’ counterpart, the Law of Regression.
Regression can work its universal magic twice as fast as progression.
The true Way of the samurai was really quite simple and uncluttered.
It is perfectly normal for stock prices to show considerable fluctuation, or volatility, within a given year.
Money is an emotional currency that can relate to an individuals’ needs for security, power, respect, love, esteem, and self-determination. If you don’t know who you are, the stock market can be the most expensive place to learn.
The Bailard, Biehl & Kaiser Five-Way Model divides investors into five categories:
Adventurers - are risk takers and are particularly difficult to advise.
Celebrities - like to be where the action is and make easy prey for fast-talking brokers.
Individualists - tend to avoid extreme risk, do their own research, and act rationally.
Guardians - are typically older, more careful, and more risk averse.
Straight Arrows - fall in between the other four personalities and are typically very balanced.
Greed moved stocks beyond their intrinsic value.
Fear moved prices below intrinsic value.
On one side of each speculative trade is a participant who believes he or she has superior information and on the other side is another participant who believes his/her information is superior. Yet they can’t both be right.
If the blind lead the blind, both fall into the ditch. Many of the actions in the stock market, despite having a large following, often get reversed frequently.
Mass behaviour is often fickle.
Many tricky issues in the stock market are based on little information. But when the decisions made on the basis of so little information are imitated by other investors, an information cascade is created.
With tens of thousands of investment professionals around the world keeping tabs on the market every microsecond of every trading day - not to mention hundreds of thousands or more amateurs - the likelihood that any one of them is going to be able to beat the market consistently is highly remote. While there will always be extreme exceptions, on average, performance will narrow over the long term.
The standard argument against the Efficient Market Hypothesis goes something like this: the stock market is not efficient because there are many bad opinions, incorrect interpretations, and emotions such as pride, doubt, fear, and hope. Sometimes there are simply bad or shallow judgements, numerous complex variables, and fast-changing events, which investors do not properly weigh. Even when they possess all relevant information, which is the exception rather than the rule. Basically, the market is not efficient because too many wrong opinions and strong investor emotions can create trends sending stocks far below or above reasonable values.
Trading decisions on price have to be made without knowledge of future prices.
Understanding liquidity means understanding the markets’ internal workings.
These are quotes taken from share investing books I have read. If you have a good quote why not add it to the thread.
Enjoy!
STOCK MARKET WISDOM
Speculart - ‘Latin’ - means to spy out and observe.
He will buy only good businesses with good management and good long term prospects.
Holding quality growth stocks for long periods is the most remunerative strategy for almost everybody.
Think quality. Think long term.
The really big gains in shares come over the long-term - they are the result of conspicuous absence of trading activity. Lethargy is preferable to hyperactivity. Turn off the stock market and the economy: use all that saved energy to find the best companies.
If a positive growth rate appears to be established the stock is almost certain to develop some type of following.
Business is remarkably simple:- get the right management team, cut cost, focus on the core business and get a real strategy.
A major factor that confuses novice investors is that the market anticipates future events, whereas people are designed to react to present events.
He could and did turn in a twinkling, if he found he was wrong.
Buy on the way up.
Sitting tight.
Without faith in his own judgement no man can go very far in this game.
This counsel may be the most important I can suggest: trade alone. Close your mind to the opinions of others; pay no attention to outside influences. Disregard reports, rumours, and idle board-room chatter. If you are going to trade actively and are going to employ your own judgement, then for heaven’s sake, stand or fall by your own opinions.
Figure out supply and demand and you’ll get extraordinarily rich. It’s astonishing how many people cannot grasp this.
Never argue with the tape.
Share performance is ultimately a reflection of the past progress and expected future prospects.
Analysts are supposed to be critics of corporations. They end up being public relations spokesmen for them. What a waste!
The ability to wait - wait for an existing investment to mature, wait for a potential investment to become available at a reasonable price - often demands a degree of patience which is extremely difficult to sustain in the face of contrary interim market behaviour.
Don’t lose money. If you don’t know the facts, don’t play. Something will come along where you know it’s right, then play.
Seek facts diligently; advice never.
You never make big money in the market without getting in the way of danger.
You can sometimes make 20 fold while the most you can possibly lose is 100%.
1. A sound balance sheet.
2. Satisfactory cash flow.
3. An above average return on equity.
4. Able management.
5. A satisfactory outlook for continued growth.
6. An attractive product or an attractive service.
7. A strong market in which to operate.
DISCIPLINE CONCENTRATION PATIENCE
The market is never wrong in what it does; it just is.
The market doesn’t give you money, you give it to yourself based on your ability to perceive opportunity and execute a trade.
Maxim - the market hates uncertainty.
Keep in mind that prices move in the direction of the greatest force (traders fulfilling their beliefs about the future).
Trading is very difficult, a doctor or lawyer goes to school for seven or eight years to learn his profession and then makes a little money and comes into the market expecting to win right away. Remember, trading is by far the toughest game in the world, because you’re competing against the keenest minds in the world.
Diversification is a necessity for the beginner. On the other hand the really great fortunes were made by concentration.
Concentration of investments in a minimum of stocks insures that enough time will be given to the choice of each so that every important detail about them will be known.
One of the immutable laws of investing; you have to take risks to generate rewards and the larger the risks, the greater the potential rewards.
Trading - taking money away from other traders with no services rendered.
Essential motives that drive most ambitious companies in America:
1. A desire for growth.
2. A thirst for marketplace.
3. A hunger for dominance.
Trading - 80% Psychological and 20% Methodology.
He is always searching for investments where the risks are minimised.
Diworseification.
The p/e ratio of any company that’s fairly priced will equal its growth rate of earnings.
Unless I’m confident enough in the company to buy more shares, I ought to be selling immediately.
If companies aren’t going anywhere fast, neither will the price of their stock.
A life without mistakes is a failure.
The only growth rate that really counts - earnings.
Any time you own a security, ask yourself if you would buy it today. If you wouldn’t buy it, you should consider selling it.
The market is the market. If the management doesn’t perform it is reflected in the share price.
The price of a security represents a consensus.
What you need is a crystal ball and the intuition to pick out the new growth stock, the one you can still buy ’almost for free’.
The most important fundamental influence on stock prices is the level of future growth of corporate earnings and dividends.
Picking stocks whose earnings grow is the name of the game.
Buying unrecognised growth stocks whose p/e is not any substantial premium over the market. If the growth does not materialise, damage is likely to be less severe.
Successful investing demands both intellectual and psychological acuteness.
There are three ways of making money:
1. Sell your time.
2. Lend your money.
3. Risk your money.
A growth stock - earnings went up and the dividend went up. The price went up.
The City is not a place to try to make an isolated profit. Rather it is where one goes to set up a continuing and consistent investment or speculation program.
It is the expectation of coming events, rather than the events when they materialise, that moves markets.
Bargains are the holy grail of the true stock picker.
It always was and always will be the power to understand and the ability to act that turns information into profits.
The greatest safety lies in putting all your eggs in one basket and watching the basket. You simply cannot afford to be careless or wrong. Hence you act with much more deliberation.
The best psychologists are usually the best investors. Successful investment is a matter of experience, information, and judgement and not a matter of pure fact and pure formula.
It has been my experience that the most successful investor is the one who has most of his money committed on his most successful ideas and the least amount of money on his poorest.
Never fall in love with a stock; always have an open mind.
To invest in the stock market is automatically a sign of boldness. The timid fail immediately. The simple act of buying a stock is a bold announcement: my perception of this stock is right and everyone else (who didn’t buy it) is wrong.
Growth does not just happen. It starts in the minds of management. It is a burning obsession.
Unless the Chief Executive is strong on marketing, the company is likely to stumble repeatedly over itself.
Marketing is an art form. A marketer is an artisan.
Enriching yourself in the market can be accomplished only by getting other people’s money.
Privileged information is the goal of most market players.
The forces knocking stock prices about are imbalances in buy and sell decisions.
The thoughts of millions of people concerning the prospects of the many businesses upon which our society relies are mirrored in the market quotations on the financial pages of daily newspapers. What fantastic complexity! What unfathomable, immeasurable forces underlie each of the numbers!
Be in harmony with the market.
Traders, acting in their belief in the future by putting on a trade, are the only force that can act on prices to make them move.
Prices are going to go in the direction of the greatest force.
The market is never wrong it just is.
As long as there is disagreement between individuals about the value of goods and service, prices will fluctuate, thereby creating opportunities for a trader to make money if they will assume the risks.
We are all speculators, except when we lose - then we are all gamblers.
Appreciate and learn the nitty-gritty of buying low and selling high.
Success in any endeavour requires single-minded attention to detail and total concentration.
A (speculator) must think for himself; must follow his own connections; self trust is the foundation of successful effort. (Don’t) follow the mentally lazy habit of allowing a newspaper or broker or a wise friend to do your security market thinking.
Forget about the great prices you could have traded at. Should you enter, add or exit: RIGHT NOW!
The market will always be open. Wait for a good opportunity and then barrel in.
Prices provide the information.
Speculation is an intricate dance between risk and reward.
Many deep thinkers consider the ordering and connecting of discrete data to be the fundamental organizing activity of human nature. The successful human, speculator, or otherwise, must use his ability to adapt to an ever-changing environment.
Trends last longer than expected.
Buffett tried to analyse the long term prospects of individual companies.
Buffett defined investing as an attempt to profit from the results of the enterprise, as distinct from the price action.
The most profitable strategy - long-term growth stock immobilism.
Remember that you are in a contest with yourself and not the market.
The market is an easy game to play.
Playing the market is the hardest way to make an easy living.
Flow with the market’s directions.
The market is our teacher, and it pays to listen.
The market never lies.
The river always wins. Paddle with the stream.
The perfect master is the market itself. The market speaks to us in one language - price.
You have to trade with an empty mind.
One of the wealthiest traders I knew told me it took him twenty years to get it right, and he was a fast learner.
Trust the earnings figures and nothing else.
Sound investing can make you very wealthy if you’re not in too big a hurry.
A lot of great fortunes in the world have been made by owning a single wonderful business.
Stocks are simple. All you do is buy shares in a great business for less than the business is intrinsically worth, with managers of the highest integrity and ability. Then you own those shares forever.
Continually take the high probability bets.
As a trader, professional or part-time, on-or off floor you are competing to make money with the best traders that the largest banks can find. You have to ask yourself what is your edge? How are you going to take money from the full-time professional who has been trained to do this by a team of experts and is paid to be constantly on the ball? Focus on one area, say support services companies and try to become an expert on them.
What is going to drive this stock to move?
I am out, unless I see a reason to be in the stock.
Patiently wait for the greatest reward/risk ratios.
Cultivate patience.
I think great traders certainly have to have a psychological stability about themselves but not too much stability, because one has to have a certain flair for risk.
The market has intelligence that is beyond what our minds can comprehend. The market is the accumulation of all the information that there is and the market indicates that price.
I know that if I am thinking too much about a trade, then it is time to get out.
Powerful businesses are based on strong individuals who build strong teams around ideas that matter to them.
The true speculator is one who observes the future and acts before it occurs.
The keys to success are an accurate analysis, a willingness to take risk, and the ability to act.
The more objective and the less emotionally involved you are, the more successful you tend to be.
I don’t know of a better index of a company’s success than the price of it’s stock.
The future belongs to companies that can come up with a clear and compelling vision of their market and their place in it in five years time and then transform themselves to get there first.
The more complex the information processing and the larger the amount of information to be integrated, the more complex decision making gets to be.
Analysts are supposed to be good configural reasoners, which means they are supposed to be able to take all of the disparate and changing information, put it to together, and come out with an answer.
If a stock is popular and there’s a negative surprise, the perceptions change. We call it an event trigger, but another term could just as easily be a perceptual change.
People think the worst of these unpopular stocks, but if they surprise positively, the market looks at these stocks, and perceptions change.
A good stock should have good earnings. Negative surprises for stocks for which we have high expectations are murderous.
Every investment in the stock market involves making decisions the outcome of which is unknowable and unpredictable.
Uncertainty generates anxiety, a diffuse state of tension that frequently elicits either the illusion of excessive danger or the denial of a danger that should be feared.
The ultimate danger is that the individual company will go out of business.
Fantasies of making an investment so successful that the results will change one’s life is an example of an investment flying fantasy.
Because uncertainty is endemic to the investment process, anxiety (conscious or unconscious) appears to accompany each investment decision.
My own qualities research suggests that those individuals who experience time as passing quickly have more capacity to tolerate volatility than those who experience time as passing slowly.
I believe that the deeply ingrained psychological tendency to function in herds, especially under conditions of risk, was in evolutionary time an adaptive, protective mechanism that remains a built-in part of the human psyche.
To invest successfully means that investors must go against a long and powerful evolutionary history of psychological adaptation, which has not selected them for the task.
Can I tolerate uncertainty without undue anxiety? Do I have more faith in my own judgment than in others?
Those whose greed is fuelled by archaic grandiosity tend to be a continual loser in the market, while appearing outwardly as extremely successful.
It takes time for small caps to become large caps, and therefore small-cap investing requires unusual patience to reap the benefits of the enormous upside potential of some of these companies.
Ability to correctly assess the intrinsic value of a company and the quality of its management.
Logically stocks are bought for the purpose of being sold.
Most individual investors follow no investing plan and are very much prey to their emotions.
Fear quickly takes over if the market begins to go down.
Enforced discipline and the contrarian nature.
Ben Graham had a very correct insight when he said that in the short run the market is a voting machine, but in the long run it’s a weighing machine.
Psychologists discovered years ago that human beings find it impossible to contemplate true randomness.
It’s a game of intelligence in which you pit your knowledge and common sense against others, and if your long-term analysis is correct, you win.
Investment greatness only comes to those who are willing to go out on the limb in a meaningful way.
Ignore the market. Don’t even try to guess its direction. Buy quality stocks at undervalued prices, and just hold on until those values are recognized. It does get any simpler than that.
The most important factor to allow you to let the market’s underlying simplicity shine through is to understand the importance of viewing stocks as operating businesses.
This ability to focus on the long term, more than anything else, is what will position an investor for eventual success.
It requires discipline to hold.
View this not as a stock market but strictly as a market of individual stocks.
Don’t let fear and weakness turn you, a long-term investor, into a short-term seller.
If you want to buy a stock when it is cheap, you have to go against the grain: it is cheap because most people think it should be and will stay cheap.
At big companies you talk too executives. At small companies you talk to owners.
A small company has just one or two businesses, so you can understand it.
It’s the owner who is the risk taker able to conceive and create something that can make him and those who invest in him rich.
As a company grows and prospers, it can cross the threshold of institutional interest. The ugly duckling is pronounced a swan, and its p/e ratio increases.
Warren Buffett and George Soros, two of the greatest investors of the twentieth century.
Buffett - the consummate buy-and-hold strategist.
Soros - the mercurial trader.
The great visionary investments have two primary features: the first is a powerful idea, the second is execution.
A well positioned company can get even better.
If lack of control is an issue for you, then you may need to take some non-standard steps to make the stock market a more comfortable place for you. Shareholder activism is one way: Attend the AGM. Ask questions. Do everything you can to make you feel like part of the active management process.
You want your image of the company to be what you saw on your last visit, not what you’re looking at on Bloomberg.
Leaders who slaved to see their visions become a reality, a shareholder barely has to do anything. It’s an incredible deal, when you think about it.
When Pete Sampras gives a clinic on how to serve, he doesn’t really expect that anyone in the class is going to do it as well as he can. But you or I could literally match Warren Buffett’s stock market performance.
The act of waiting, being characterised by lack of both productivity and control, is one of the most stressful things we humans can undergo.
Keep it simple and consistent.
Ignore the news media.
Clearly understand the Risk/Reward Ratio.
Speculation demands cool judgement, self-reliance, courage, pliability and prudence.
The worst losses in the market come from uninformed people buying greatly overvalued stocks.
Get accurate information. Demand facts, not opinions.
Investigate a stock thoroughly before you buy it.
Remember that it is easier to buy than sell. The saleability of a stock is very important.
The market moves up slowly, but goes down fast.
Remember that the market actually is a barometer of business and credit.
Don’t listen to or give tips.
Fortunes are not easily made in Wall Street. Some professionals give their lives to the market and die poor.
Don’t blame the stock exchange for your own mistakes.
Don’t let emotion or prejudice warp your judgement. Base your operations on facts.
Speculation is an art. The first principle of every art is to have at the outset a clear conception of the end aimed at.
Every speculator must think for himself.
Trading, speculating, or investing in the markets, then, is not a science, but an art that is carefully learned, nurtured, and practiced over a long period of time.
History tells us that it is not possible to accumulate a significant amount of money in a brief time unless you are extremely lucky.
Markets are constantly probing for the vulnerabilities and weaknesses that we all possess.
Uncontrolled tape watching or quote gathering is a sure way of losing perspective.
Tickeritis - constant need to watch the market.
Livermore was a great believer in the theory that the real news is not in the headlines but behind them.
The two most important attributes of a successful investor, Livermore said patience and knowledge.
Some of the sharpest minds have spent huge amounts of time and money in an effort to beat the markets.
If you do your homework properly, just relax and let the markets do the rest.
Stock groups move in and out fashion just like styles of clothing.
His belief that if you are right about the company and buy it at a sensible price, you will eventually see your stock appreciate.
Buy a stock only as a share in a good business that you know a lot about.
The market is totally objective, it is the participants who are emotional.
Rising prices, remember, build confidence.
When Soros believed he was right about an investment, nothing could stop him. No investment position was too large. Holding back was for wimps. The worst error in Soros’s book was not being too bold, but too conservative. ’Why so little?’ was one of his favourite questions.
His greatest key to success is his psychology. He understands the herd instinct. He understands when lots of people are going to go for something, like a good marketing man.
$250,000. That was the beginning of the Soros fortune.
The way to attain truly superior long-term returns is to grind it out until you’re up 30 to 40 percent, and then if you have the conviction, go for a 100 percent year. If you can put a few near-100 percent years and avoid down years, then you can achieve really outstanding long-term returns.
When you have tremendous conviction on a trade, you have to go for the jugular. It takes courage to be a pig. When you’re right on something, you can’t on own enough.
Buy into companies that have disciplined plans for achieving dramatic long-range growth in profits and that have inherent qualities making it difficult for newcomers to share in that growth.
There are a relatively small number of truly outstanding companies. Their shares frequently can’t be bought at attractive prices. Therefore, when favourable prices exist, full advantage should be taken of the situation.
I believe it pays to ignore near-term fluctuations in situations that hold real promise.
In the stock market a good nervous system is even more important than a good head.
Good managements, those most suitable for outstanding investment, are nearly all quite frank in answering questions about the company’s weak points as fully about its strong points.
Practical investors usually learn their problem is finding enough outstanding investments, rather than choosing among too many.
Once a stock has been properly selected and has borne the test of time, it is only occasionally that there is any reason for selling it at all.
Opportunities for attractive investments are extremely hard to find.
The company into which the investor should be buying is the company which is doing things under the guidance of exceptionally able management.
The young growth stock offers by far the greatest possibility of gain. Some times this can mount up to several thousand per cent in a decade.
A great business is one that has a readily identifiable business advantage, which is to say they do things systematically better than the competition and it shows up over and over again.
If you’re in a great company run by a great manager, you can’t imagine how far they can go.
To me identifying great companies and participating in their success over a long period of time is what investing is all about. If you go back hundreds of years it’s what merchant banks did. They went around and found really clever entrepreneurs, gave them some capital, and participated in their success. That’s all the stock market allows us to do. The beauty of it is we don’t have to run the business or manage the minutia and the detail. We just have to identify which people are going to be successful.
You want people who are smart, have a history of delivering, and communicate well.
Investing involves sifting through a lot of a data and trying to figure out what has the highest probability of succeeding.
In real estate, it’s location, location, location. In stocks, it’s quality, quality, quality.
I love inside ownership.
There’s a certain mentality, a certain optimism you must have to be a growth investor.
All the CEO’s who failed didn’t execute in the day-to-day operations. It wasn’t about vision, it was about execution.
I see myself as a big sieve. I’m catching lots of information, and I know the kinds of things I’m looking for. If I find something that looks as if it might be interesting I’ll do a lot more work on it.
The information comes out pretty fast. If you wait for print, it’s too late.
Yacktman is a big believer in equity investing, regardless of one’s age. In fact, he has a 90 year old client who has some 90% of her portfolio in stocks.
Buffett isn’t really a portfolio manager. He’s a businessman who often buys pieces of companies through the stock market.
My feeling is that the only time I feel comfortable is when I’m in stocks. Cash is the unsafe place to be. Stocks are the permanent place. That’s where the returns are.
The Samurai of feudal-era Japan was probably history’s most accomplished ‘professional risk-taker.’
You must first understand that before you can elevate your personal performance in any area, your performance must first be viewed as an art form, and that the pure objective of practicing this art is the refinement of your inner spirit and discipline and ultimately the unconditional enjoyment and appreciation of having done it as well as is currently possible.
Attention fully on the flawless execution of the act - the trade.
Trading Samurai - one who serves and protects his capital.
Your ability to live comfortably in the present moment, which of course is the only moment you have any real control of in your life.
The validity of viewing market engagement as a war game and viewing trading as warriorship.
If your beliefs or positions are such that you are willing to risk all or even die for them, then you can count on them as being valid.
Any trader worth his salt knows it is imperative to first get in sync (aiki) with the market flow.
There are two kinds of people in this world. First, there are those who follow life’s lead and spend their time and energies defending against whatever life might throw at them, then living off the leftovers of the battle. Then there are those who courageously attack life by taking advantage of every opening and opportunity that may prevent itself, thereby setting the pace of life and living off the spoils of victory.
The Samurai would never have considered going into battle to test some new technique or system of fighting before thoroughly practicing it in controlled scenarios.
The true warrior knows that he must practice his methods and techniques to a point of near-perfection before ever trying to trust them to serve him in battle. He knows that there is simply no other way besides dedicated practice to acquire enough mastery of a particular technique to honestly be able to call it an unconsciously competent skill.
The Samurai did acknowledge and experience fear. The difference between a samurai and the average man, however, was that the samurai never let fear stop them from taking action.
Accept all possible losses before entering the battle.
Study and learn about money management and the statistical nuances of the (war) games.
The more you know about a situation or an opponent, the less likely you are to become fearful or doubtful.
LAW OF EVOLUTION - creation (reality) is in a constantly evolving state of being! Thus it is imperative that you understand that, within the Law of Evolution, there exist two antithetical sub laws that have a dramatic effect on your existence: the Law of Progression and its ‘evil’ counterpart, the Law of Regression.
Regression can work its universal magic twice as fast as progression.
The true Way of the samurai was really quite simple and uncluttered.
It is perfectly normal for stock prices to show considerable fluctuation, or volatility, within a given year.
Money is an emotional currency that can relate to an individuals’ needs for security, power, respect, love, esteem, and self-determination. If you don’t know who you are, the stock market can be the most expensive place to learn.
The Bailard, Biehl & Kaiser Five-Way Model divides investors into five categories:
Adventurers - are risk takers and are particularly difficult to advise.
Celebrities - like to be where the action is and make easy prey for fast-talking brokers.
Individualists - tend to avoid extreme risk, do their own research, and act rationally.
Guardians - are typically older, more careful, and more risk averse.
Straight Arrows - fall in between the other four personalities and are typically very balanced.
Greed moved stocks beyond their intrinsic value.
Fear moved prices below intrinsic value.
On one side of each speculative trade is a participant who believes he or she has superior information and on the other side is another participant who believes his/her information is superior. Yet they can’t both be right.
If the blind lead the blind, both fall into the ditch. Many of the actions in the stock market, despite having a large following, often get reversed frequently.
Mass behaviour is often fickle.
Many tricky issues in the stock market are based on little information. But when the decisions made on the basis of so little information are imitated by other investors, an information cascade is created.
With tens of thousands of investment professionals around the world keeping tabs on the market every microsecond of every trading day - not to mention hundreds of thousands or more amateurs - the likelihood that any one of them is going to be able to beat the market consistently is highly remote. While there will always be extreme exceptions, on average, performance will narrow over the long term.
The standard argument against the Efficient Market Hypothesis goes something like this: the stock market is not efficient because there are many bad opinions, incorrect interpretations, and emotions such as pride, doubt, fear, and hope. Sometimes there are simply bad or shallow judgements, numerous complex variables, and fast-changing events, which investors do not properly weigh. Even when they possess all relevant information, which is the exception rather than the rule. Basically, the market is not efficient because too many wrong opinions and strong investor emotions can create trends sending stocks far below or above reasonable values.
Trading decisions on price have to be made without knowledge of future prices.
Understanding liquidity means understanding the markets’ internal workings.
Last edited:
I think thats a fairly exhaustive list of quotes there (and very hard to read I'm afraid!) - Is there anything left to add??? 
