Whats Your Favourite Quotes?

[bovverd]

Whenever my thoughts on investing become fragmented due to the endless amounts of statements and advice on offer I find reading a list of my favourite quotes help re-align my approach to ideas. I thought I would post a few here.

Does anyone else have any quotes they regularly refer back to, to remind them of exactly what they are trying to achieve and why? Feel free to add your own.

“If you keep making 30 to 40 percent per annum for 25 years, you make an awful lot of money even if you start with very little.” - George Soros

“I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that." - Warren Buffett

It always seemed, and still seems, ridiculously simple to say that if one can acquire a diversified group of common stocks at a price less than the applicable net current assets alone - after deducting all prior claims, and counting as zero the fixed and other assets - the results should be quite satisfactory." -Ben Graham

I own a lot of stocks. Warren doesn't like that, but I can't help it. You have to do what's comfortable for you, even if it's not as profitable as what Warren does. There's only one Warren. [Because I own so many stocks], the risk of any one is not that great. I try to buy securities that are undervalued based on assets more than earnings. I do a better job on assets than earnings because earnings have a way of changing. - Walter Schloss

Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily-understandable business whose earnings are virtually certain to be materially higher five, ten and twenty years from now - Buffett


Price is what you pay; value is what you get. - Warren Buffett

[PrivateInvestor]

Originally Posted by bovverd

Whenever my thoughts on investing become fragmented due to the endless amounts of statements and advice on offer I find reading a list of my favourite quotes help re-align my approach to ideas. I thought I would post a few here.

Does anyone else have any quotes they regularly refer back to, to remind them of exactly what they are trying to achieve and why? Feel free to add your own.

Because I started out my career as an engineer, I have to remember that investing is not a precise science (per the "thick-tail distribution curve" that is described in the book The Black Swan: The Impact of the Highly Improbable by Nassim Taleb). My favorite quote to remind myself to think outside the box (and to cover myself with a big margin of safety) is:

"I would rather be vaguely right than precisely wrong." -- Keynes

I've also discovered over the years that it pays to have a "personal mantra" to keep myself focused on what I'm trying to accomplish. My current mantra that I repeat to myself several times a day is:

"My goal is to double my investment income over the next four years."

[bovverd]

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

-- Benjamin Graham



Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily-understandable business whose earnings are virtually certain to be materially higher five, ten and twenty years from now.

-- Warren Buffett



Price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal. At other times he will do better if he forgets about the stock market and pays attention to . . . the operating results of his companies.

-- Benjamin Graham


All intelligent investing is value investing -- to acquire more than you are paying for. Investing is where you find a few great companies and then sit on your ass.

-- Charlie Munger


Investors should remember that their scorecard is not computed using Olympic-diving methods: Degree-of-difficulty doesn’t count. If you are right about a business whose value is largely dependent on a single key factor that is both easy to understand and enduring, the payoff is the same as if you had correctly analyzed an investment alternative characterized by many constantly shifting and complex variables.

-- Warren Buffett

[bovverd]

Munger: I don't know. We have such a fingers and toes-style around here. Warren often talks about these discounted cash flows, but I've never seen him do one.

Buffett: Some things you only do in private, Charlie.

Munger: Yeah. If it isn't perfectly obvious that it's going to work out well if you do the calculation, then he tends to go on to the next idea.

Buffett: That's true. It's sort of automatic. If you have to actually do it with pencil and paper, it's too close to think about. It ought to just kind of scream at you that you've got this huge margin of safety. (1996 Annual Meeting)

[joshuat]

That last one is nice, bovverd.

[npg]

Investing is where you find a few great companies and then sit on your ass.

Charlie's quote pretty much sums it up.

[bovverd]

Pabrai: Usually two to three variables control most of the outcome. The rest is noise. If you can handicap how those key variables are approximately likely to play out, then you have a basis to do something. Things that are approximate and probabilistic don't lend themselves too well to Excel modeling. For me, if I find myself reaching for Excel, it is a very strong sign to take a pass. The thesis ought to be painfully simple in your head.

[bovverd]

Soros:

The worse a situation becomes the less it takes to turn it around and the bigger the upside.

[Stockowner]

"My goal is to double my investment income over the next four years."

May I be allowed to disagree on that quote?

A lot of things are up to the market. If we are in a prolonged bear market you might get a lot of great bargains but it can still be a few years before the market catches up.

The danger of setting a "goal" is that you might incur more risk in order to fulfill that goal. All you can do is to know you are making intelligent and conservative decisions.

[Gunnski]

For investing:

"Bad reasoning, as well as good reasoning is possible; and this fact is the foundation of the practical side of logic". ~ Charles S. Peirce

For everyday:

"What is imporant in life is life, and not the result of life". ~ Joann Wolfgang von Goeth