Quotes from William J. Bernstein

Always favor expected returns calculated from the Gordon Equation over past returns, no matter how long of a period they cover.

By this point, I hope you're moving your lips to this familiar mantra: because risk is high, prices are low. And because prices are low, future returns are high. So

The coming of the Prophet would sweep away this fragmented and pluralistic pattern of trade in the ancient world. Within a few centuries of Muhammad's death, one culture, one religion, and one law would unify the commerce of the Old World's three continents nearly a millennium before the arrival of the first European ships in the East.

So when all your friends are investing in a certain area, when the business pages are full of stories about a particular company, and when "everybody knows" that something is a good deal, haul up the red flags. In short, identify current conventional wisdom so that you can ignore it.

economist Henri Truchy noted: We judged it better to content ourselves with the untroubled possession of the domestic market than to risk the hazards of the world market, and we built a solid fortress of tariffs. Within the boundaries of this limited, but assured market, the French live calmly, comfortably enough, and leaving to others the torment of great ambition, are no more than spectators in the struggles for economic supremacy.16

it is the duty of shareholders to periodically suffer loss without complaint.

In ancient societies, the law functioned as a two-edged sword; while standardizing procedure and bringing it out into the open, the law also concentrated power in those few who could read and write.

Mesopotamian cities identified closely with their deities, and their temples functioned as the main social and economic engines. The king served as the intermediary between the city and its deity, and his palace operated side by side with the temple. Both palace and temple commanded the key function in any society: the production and distribution of food.

A good rule of thumb is to never, ever pay more than 15 years fair rental value for any residence.c This computes out to a 6.7 percent (1/15th) gross rental dividend, or 3.7 percent after taxes, insurance, and maintenance, which is about what you might expect from a mixed portfolio of stocks and bonds.

Investing is a journey of lifelong learning

Investors tend to be touchingly naïve about stockbrokers and mutual fund companies: brokers are not your friends, and the interests of the fund companies are highly divergent from yours.

The scribe was no mere linguistic technician, but rather the sole possessor of the skill set that made civilization hum, a sort of investment banker, engineer, and diplomat all rolled up into one. Or, in the words of the linguist Ignaz Gelb, "Writing exists only in a civilization, and a civilization cannot exist without writing."47

La rentabilidad elevada en la inversión no puede obtenerse sin asumir un riesgo sustancial. Las inversiones seguras producen escasos beneficios.

At one time or another, most of us have seen a plot of capital wealth looking something like Figure 1-1, demonstrating that $1 invested in the U.S. stock market in 1790 would have grown to more than $23 million by the year 2000. Unfortunately

Within a few decades after the conquests of Cortés and Pizarro, the cattle population of Spanish America doubled as rapidly as every fifteen months. From Mexico to the pampas of Argentina, the vast open spaces of the New World swarmed black with livestock. One French observer in Mexico wrote in wonderment at the "great, level plains, stretching endlessly and everywhere covered with an infinite number of cattle.

The reason that 'guru' is such a popular word is because 'charlatan' is so hard to spell.

Although the modern image of the imperial city is dominated by the ruins of the Coliseum and the Forum, the economic life of ancient Rome centered on side streets filled with apartments, shops, and horrea.

If you find yourself stimulated in any way by your portfolio performance, then you are probably doing something very wrong. A superior portfolio strategy should be intrinsically boring.

George Bernard Shaw's famous spelling of "fish" as "ghoti"—the first two letters pronounced as the last two in "tough," the middle letter as in "women," and the last two as in "nation.

The easiest way to get rich is to spend as little as possible.

The Stoic philosopher and playwright Seneca is said to have owned five hundred tripod tables with ivory legs—no small irony, since he was a vocal critic of the empire's extravagances.

el valor de una acción o bono es simplemente el valor presente de su flujo de ingresos futuro–

That is, we are hardwired to detect relationships where often none exist, a tendency science writer Michael Shermer has labeled "patternicity.

Only an income-producing possession, such as a stock, bond, or working piece of real estate is a true investment.