Quotes About Investment

This high-yield market resembles a nap on a railway track.

The market is like a large movie theater with a small door.

Yet they believe blindly in the stock market, and in the abilities of their pension plan manager. Why do they do so? Because they accept that this is what people should do with their savings, because experts tell them so. The doubt their own sense, but not for a second do they doubt their automatic purchases in the stock market.

What fools call wasting time is most often the best investment.

Hire the successful trader, conditional on a solid track record, whose details you can understand the least.

Don't tell me what you "think," just tell me what's in your portfolio.

Alas, investors and businesses are not paid in probabilities; they are paid in dollars. Accordingly, it is not how likely an event is to happen that matters, it is how much is made when it happens that should be the consideration. How frequent the profit is irrelevant; it is the magnitude of the outcomes that counts.

Forecasting (in words) bears no relation to speculation (in deeds).

We also saw the solution in forcing skin in the game.

Someone paid a price for the system to improve.

Sadly, it may be even worse for you to make $10 million, then lose back nine, than to making nothing at all! True, you may end up with a million (as compared to nothing), but it may be better had you got zilch. (This assumes, of course, that you care about financial rewards.)

shows why the convex likes volatility. If you earn more than you lose from fluctuations, you want a lot of fluctuations.

Luckily, I had some skin in the game for my opinions

I will retire on these profits

It netted a 4.5% revenue

Indeed much of the work of investment banks in my day was to play on regulations, find loopholes in the laws. And, counterintuitively, the more regulations, the easier it was to make money.

The effect of the leverage is that a small loss would be compounded and would wipe him out.

At the time of writing, most big recent successes (Microsoft, Apple, Facebook, Google) were started by people with skin and soul in the game and grew organically—if they had recourse to funding, it was to expand or allow the managers to cash out; funding was not the prime source of creation. You don't create a firm by creating a firm; nor do you do science by doing science.

Another recent event is the almost-instant bankruptcy, in 1998, of a financial investment company (hedge fund) called Long-Term Capital Management (LTCM), which used the methods and risk expertise of two "Nobel economists," who were called "geniuses" but were in fact using phony, bell curve–style mathematics while managing to convince themselves that it was great science and thus turning the entire financial establishment into suckers.

The dip in the market was not very large. It was just that his leverage was enormous.

Consider the situation where the dentist examines his portfolio only upon receiving the monthly account from the brokerage house. As 67% of his months will be positive, he incurs only four pangs of pain per annum and eight uplifting experiences. This is the same dentist following the same strategy. Now consider the dentist looking at his performance only every year. Over the next 20 years that he is expected to live, he will experience 19 pleasant surprises for every unpleasant one!

In fact, economic growth comes from such risk taking.

have some element of loss aversion.

who benefited from a market cycle.