Quotes About Investing

You have to keep your priorities straight, if you plan to do well in stocks.

My diaries are full of such missed opportunities, but the stock market is merciful—it always gives the nincompoop a second chance.

If my favorite Internet company sells for $30 a share, and yours sells for $10, then people who focus on price would say that mine is the superior company. This is a dangerous delusion. What Mr. Market pays for a stock today or next week doesn't tell you which company has the best chance to succeed two to three years down the information superhighway.

Most individual investors would be better off in an index mutual fund.

Investing without research is like playing stud poker and never looking at the cards. For some reason the whole business

I'm always on the lookout for great companies in lousy industries. A great industry that's growing fast, such as computers or medical technology, attracts too much attention and too many competitors.

Actually Wall Street thinks just as the Greeks did. The early Greeks used to sit around for days and debate how many teeth a horse has. They thought they could figure it out by just sitting there, instead of checking the horse. A lot of investors sit around and debate whether a stock is going up, as if the financial muse will give them the answer, instead of checking the company.

Never invest in any company before you've done the homework on the company's earnings prospects, financial condition, competitive position, plans for expansion, and so forth.

In general, if you polled all the doctors, I'd bet only a small percentage would turn out to be invested in medical stocks, and more would be invested in oil; and if you polled the shoe-store owners, more would be invested in aerospace than in shoes, while the aerospace engineers are more likely to dabble in shoe stocks. Why it is that stock certificates, like grasses, are always greener in somebody else's pasture I'm not sure.

This taught me not only that it's difficult to predict markets, but also that small investors tend to be pessimistic and optimistic at precisely the wrong times, so it's self-defeating to try to invest in good markets and get out of bad ones.

If you can't figure out what category your stocks are in, then ask your broker. If a broker recommended the stocks in the first place, then you definitely ought to ask, because how else are you to know what you're looking for? Are you looking for slow growth, fast growth, recession protection, a turnaround, a cyclical bounce, or assets?

That's not to say there's no such thing as an overvalued market, but there's no point worrying about it.

As far back as 1602, Dutch people were buying shares in the United Dutch East India Company. This was the world's first popular stock, sold on the world's first popular stock exchange, which operated from a bridge over the Amstel River in Amsterdam. Crowds of eager investors gathered there, trying to get the attention of a stockbroker, and when their pushing and shoving got out of hand, police were called in to restore the peace.

The lesson here is: don't spend a lot of time poring over the past performance charts. That's not to say you shouldn't pick a fund with a good long-term record. But it's better to stick with a steady and consistent performer than to move in and out of funds, trying to catch the waves. Another major issue is what happens to a

If you can't convince yourself "When I'm down 25 percent, I'm a buyer" and banish forever the fatal thought "When I'm down 25 percent, I'm a seller," then you'll never make a decent profit in stocks.

This is investing, where the smart money isn't so smart, and the dumb money isn't really as dumb as it thinks. Dumb money is only dumb when it listens to the smart money.

It's when you've decided to invest on your own that you ought to try going it alone. That means ignoring the hot tips, the recommendations from brokerage houses, and the latest "can't miss" suggestion from your favorite newsletter—in favor of your own research. It means ignoring the stocks that you hear Peter Lynch, or some similar authority, is buying.

To make this spectacular showing, you only had to find one big winner out of eleven. The more right you are about any one stock, the more wrong you can be on all the others and still triumph as an investor.

By now you might be wondering what's the point of investing in a stodgy old company such as IBM, GM, or U.S. Steel? There are several reasons you might do this. First, big companies are less risky, in that they generally are in no danger of going out of business. Second, they are likely to pay a dividend. Third, they have valuable assets that might be sold off at a profit.

Only invest what you could afford to lose without that loss having any effect on your daily life in forseable future.

In fact, most great investors I know (Warren Buffett, for starters) are technophobes. They don't own what they don't understand, and neither do I.

To my mind, the stock price is the least useful information you can track, and it's the most widely tracked.

If you've settled on the value approach to investing and come up with an intrinsic value for a security or asset, the next important thing is to hold it firmly. That's because in the world of investing, being correct about something isn't at all synonymous with being proved correct right away.

In good years, defensive investors have to be content with the knowledge that their gains, although perhaps less than maximal, were achieved with risk protection in place, even though it turned out not to be needed.