Wise Words

“An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative.” -Ben Graham

“Be fearful when others are greedy, and greedy when others are fearful.” -Warren Buffett

“Protect the downside. Worry about the margin of safety.” –Peter Cundill

“The less prudence with which others conduct their affairs, the greater the prudence with which we should conduct our own affairs.” -Warren Buffett

“What the wise man does in the beginning, the fool does in the end.” -Warren Buffett

“The number one idea is to view a stock as an ownership of the business and to judge the staying quality of the business in terms of its competitive advantage. Look for more value in terms of discounted future cash-flow than you are paying for. Move only when you have an advantage.” –Charlie Munger

“When it comes to investing, my suggestion is to first understand your strengths and weaknesses, and then devise a simple strategy so that you can sleep at night!” – Walter Schloss

“Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world.” – Charlie Munger

“We don’t have to be smarter than the rest. We have to be more disciplined than the rest.” -Warren Buffett

“We don’t get paid for activity, just for being right. As to how long we’ll wait, we’ll wait indefinitely.” – Warren Buffett

“We’re emphasizing the knowable by predicting how certain people and companies will swim against the current. We’re not predicting the fluctuation in the current.” -Charlie Munger

“It was never my thinking that made the big money. It was always my sitting. 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.” -Jesse Livermore

“In the short run, the market is a voting machine, but in the long run it is a weighing machine.” – Ben Graham

“Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.” – Ben Graham

“Value investing is risk aversion.” – Seth Klarman

“Value investing is at its core the marriage of a contrarian streak and a calculator.” – Seth Klarman

“To achieve long-term success over many financial market and economic cycles, observing a few rules is not enough. Too many things change too quickly in the investment world for that approach to succeed. It is necessary instead to understand the rationale behind the rules in order to appreciate why they work when they do and don’t when they don’t.” -Seth Klarman

“The game of life is the game of everlasting learning. At least it is if you want to win.” –Charlie Munger

“It is better to be roughly right than precisely wrong.” – John Maynard Keynes

“In our view, though, investment students need only two well-taught courses-How to Value a Business, and How to Think about Market Prices. Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily-understandable business who’s earnings are virtually certain to be materially higher five, ten and twenty years from now.” -Warren Buffett

“All intelligent investing is value investing — acquiring more that you are paying for. You must value the business in order to value the stock.” – Charlie Munger

“Interestingly, we have beaten the market quite handsomely over this time frame, although beating the market has never been our objective. Rather, we have consistently tried not to lose money and, in doing so, have not only protected on the downside but also outperformed on the upside.” – Seth Klarman

“Doubt is not a pleasant condition, but certainty is absurd.” –Voltaire

The outstanding fact is the extreme precariousness of the basis of knowledge on which our estimates of prospective yield have to be made. Our knowledge of the factors which will govern the yield of an investment some years hence is usually very slight and often negligible. If we speak frankly, we have to admit that our basis of knowledge for estimating the yield 10 years hence of a … [business enterprise] … amounts to little or sometimes to nothing; or even five years hence.” – John Maynard Keynes

“We believe that almost all really good investment records will involve relatively little diversification. The basic idea that it was hard to find good investments and that you wanted to be in good investments, and therefore, you’d just find a few of them that you knew a lot about and concentrate on those seemed to me such an obviously good idea. And indeed, it’s proven to be an obviously good idea. Yet 98% of the investing world doesn’t follow it. That’s been good for us.” – Charlie Munger

“An argument is made that there are just too many question marks about the near future; wouldn’t it be better to wait until things clear up a bit? You know the prose: “Maintain buying reserves until current uncertainties are resolved,” etc. Before reaching for that crutch, face up to two unpleasant facts: The future is never clear and you pay a very high price for a cheery consensus. Uncertainty actually is the friend of the buyer of long-term values.” -Warren Buffett

“Cash combined with courage in a time of crisis is priceless.” -Warren Buffett

“The most common cause of low prices is pessimism – sometimes pervasive, sometimes specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces.” -Warren Buffett

“We work really hard never to get confused with what we know from what we think or hope or wish.” -Seth Klarman

“The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.” -William Arthur Ward

“Out of clutter, find simplicity. From discord, find harmony. In the middle of difficulty lies opportunity.” -Albert Einstein

“I have no data yet. It is a capital mistake to theorise before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.” -The Adventures of Sherlock Holmes

“The stock market is filled with individuals who know the price of everything, but the value of nothing.” – Phil Fisher

“In economics, you always want to ask ‘And then what?'” – Warren Buffett

“The minute you get away from the fundamentals – whether it’s proper technique, work ethic, or mental preparation – the bottom can fall out of your game, your schoolwork, your job, whatever you’re doing.” -Michael Jordan

“Be so good they can’t ignore you.” -Steve Martin

“Acquire Riches by Industry and Frugality.” -Ben Franklin

“Your life must focus on the maximization of objectivity.” -Charlie Munger

“The harder you work the luckier you get.” -Ben Franklin

“More important than the will to win is the will to prepare.” -Charlie Munger

“In all things success depends on previous preparation, and without such previous preparation there is sure to be failure” –Confuciu

“I have been speculating…what makes a man a discoverer of undiscovered things, and a most perplexing problem it is. Many men who are very clever, — much cleverer than discoverers — never originate anything. As far as I can conjecture, the art consists in habitually searching for causes or meaning of everything which occurs. This implies sharp observation and requires as much knowledge as possible of the subject investigated.” -Charles Darwin

“The most difficult subjects can be explained to the most slow-witted man if he has not formed any idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of doubt, what is laid before him.” –Leo Tolstoy

“It is impossible to begin to learn that which one thinks one already knows.” –Epictetus

“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

“We have two kinds of forecasters, those who don’t know and those who don’t know they don’t know.” -John Kenneth Galbraith

“We have a passion for keeping things simple.” -Charles Munger

“The harder you work, the more confidence you get. But you may be working hard on something that is false.” -Charles Munger

“Simplicity means the achievement of maximum effect with minimum means.” -Koichi Kawana

“If you can’t explain it simply, you don’t understand it well enough.” -possibly by Albert Einstein