Quotes About Market

In the short run, the stock market is a voting machine; in the long run it is a weighing machine. —Benjamin Graham, Security Analysis (1934)

Hear David Swensen, widely respected chief investment officer of the Yale University Endowment Fund. "A minuscule 4 percent of funds produce market-beating after-tax results with a scant 0.6 percent (annual) margin of gain. The 96 percent of funds that fail to meet or beat the Vanguard 500 Index Fund lose by a wealth-destroying margin of 4.8 percent per annum.

The best way to implement this strategy is indeed simple: Buy a fund that holds this all-market portfolio, and hold it forever. Such a fund is called an index fund. The index fund is simply a basket (portfolio) that holds many, many eggs (stocks) designed to mimic the overall performance of the U.S. stock market (or any financial market or market sector).

In the casino, the house always wins. In horse racing, the track always wins. In the Powerball lottery, the state always wins. Investing is no different. In the game of investing, the financial croupiers always win, and investors as a group lose. After the deduction of the costs of investing, beating the stock market is a loser's game.

Relying on the market to provide both private and public goods will always lead to underprovision of the latter.

Market failure isn't an intellectual curiosity. In many areas of the economy, such as health care, high technology, and finance, it is endemic.

We must look at the price system as . . . a mechanism for communicating information if we want to understand its real function," Hayek

The way to make money is to buy when blood is running in the streets.

Nearly 60 percent of the American economy is tied up in foreign trade, which means millions of U.S. jobs and families are linked to the undulations of the global market.31

I'm at the stage in life where I get a lot of pleasure out of finding a cheap stock.

If you expect to continue to purchase stocks throughout your life, you should welcome price declines as a way to add stocks more cheaply to your portfolio.

present depressed state of the market for diamonds was "the result of the economy, changes in social attitudes and the promotion of competitive luxuries.

Big business will still leave room for small business.

The new competition is probably keenest in the food industries because we have a very real limitation on what we can consume—in spite of higher incomes and higher living standards, we cannot eat more than we can eat.

Lesson: Do not assume that what investors call momentum, a long streak of either rising or falling prices, will continue unless you can make a sound case that it will.

Smith suggested that in an economy of many small buyers and sellers, each trying to increase his own profit, our collective benefit would be maximized as though guided by an "invisible hand." The notion is of limited use, because most markets are not as Smith assumed. Take computer chips: 99.8 percent of them, worldwide, are made by just two US companies, and the smaller one is fighting to survive.

Neither Jerry nor I believed the efficient market theory. I had overwhelming evidence of inefficiency from blackjack, from the history of Warren Buffett and friends, and from our daily success in Princeton Newport Partners. We didn't ask, Is the market efficient? but rather, In what ways and to what extent is the market inefficient? and How can we exploit this?

As Keynes said, the market can remain irrational longer than you can remain solvent.

The classic view of the correct price of a common stock is that it is derived from the value of all the future earnings. These earnings are uncertain and subject to unknowable factors. Could anyone have known beforehand how to allow for the impact of 9/11 on the future earnings, hence on the then current market price, of firms headquartered in the Twin Towers of the World Trade Center?

The executives claim that "market forces" determine their salary. However, as Moshe Adler, in his article "Overthrowing the Overpaid," points out, economists David Ricardo and Adam Smith, writing more than two hundred years ago, "concluded that what a person earns is determined not by what that person has produced but by that person's bargaining power.

The classic view of the correct price of a common stock is that it is derived from the value of all the future earnings. These earnings are uncertain and subject to unknowable factors. Could anyone have known beforehand how to allow for the impact of 9/11 on the future earnings, hence on the then current market price, of firms headquartered in the Twin Towers of the World Trade Center? These future payoffs are discounted to a present value reflecting their various probabilities and risks.

Portfolio insurance was designed to protect investors from large market declines. Ironically, the cure became the cause.

You can spot, for instance, where the buying is only a trifle better than the selling. A battle goes on in the stock market and the tape is your telescope. You can depend upon it seven out of ten cases.

It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market.