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To invest is commit money to make a return

• Invest: To put money, effort, time, etc. into something to make a profit or get an advantage. Cambridge Dictionary
• Invest: To commit (money) in order to earn a financial return. Merriam Webster
• Saving,  Wealth,  Frugality,  Growth,  Progress

Value investing is investing in good businesses when they are undervalued and then holding onto them for the long term 

• While some might mistakenly consider value investing a mechanical tool for identifying bargains, it is actually a comprehensive investment philosophy that emphasizes the need to perform in- depth fundamental analysis, pursue long- term investment results, limit risk, and resist crowd psychology. Seth Klarman
• 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
• Focus on ‘value’ stocks. Studies have shown that buying companies when they’re cheap (when the market value of the company is only slightly higher than the value of the assets on its books) generates much greater returns than buying more expensive fast- growing ‘growth’ companies. Buffett seems to know this, because he routinely buys companies when they are unloved and their stocks are relatively cheap. Matt Krantz
• The very term “value investing” is redundant. What is investing if it is not the act of seeking value at least sufficient to justify the amount paid? Consciously paying more for a stock than its calculated value – in the hope that it can soon be sold for a still-higher price – should be labeled speculation (which is neither illegal, immoral nor — in our view — financially fattening). Warren Buffett
• Value investing is at its core the marriage of a contrarian streak and a calculator. Seth Klarman
• As time goes on, I get more and more convinced that the right method of investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes. M. Keynes
• Stocks are simple. All you do is buy shares in a great business for less than the business is intrinsically worth, with management of the highest integrity and ability. Then you own those shares forever. Warren Buffett
• Figure out what something is worth and pay a lot less. Joel Greenblatt
• Look to add quality, dividend-paying, blue chips when they become irrationally oversold and undervalued. That is how and when experienced investors create blue chip investment portfolios which serve them well throughout their entire lives with growth of capital and growth of dividend income. The process is called ‘investing’ as opposed to whatever the hype and hope of the moment is in style. Kelley Wright
• You stick to value, to Benjamin Graham, the man who wrote the bible for the market. It’s a mistake to believe you can do more, I warn you. John Maynard Keynes was one of the most famous economists in history. He was a genius, but he failed as a macro investor. It was hard to believe at the time. But when he became a bottom-up value guy, well, he became very successful. With value investing, you don’t have to bend the truth to accommodate periods with derivatives and manias. Value investing will almost always be right. Irving Kahn

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Value investing, though a well proven method, is not for everyone 

• It turns out that value investing is something that is in your blood. There are people who just don’t have the patience and discipline to do it, and there are people who do. So it leads me to think it’s genetic. Seth Klarman
• Warren Buffett has said many times that people either get value investing in five minutes or they won’t get it in five years. So, there is something in the human brain, that for some of us, makes all the difference in the world right away and the patience it requires is part of the wiring process. Mohnish Pabrai
• Ultimately, value investing needs to fit your character. If you are predisposed to be patient, disciplined and psychologically appreciate the idea of buying bargains, then you’re likely to be good at it. If you have a need for action, if you want to be involved in the new and exciting technological breakthroughs of our time, that’s great, but you’re not a value investor, and you shouldn’t be one. Seth Klarman
• Value investing strategies have worked for years and everyone’s known about them. They continue to work because it’s hard for people to do, for two main reasons. First, the companies that show up on the screens can be scary and not doing so well, so people find them difficult to buy. Second, there can be one-, two-or three-year periods when a strategy like this doesn’t work. Most people aren’t capable of sticking it out through that. Joel Greenblatt

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Learn the basic principles of investing …

• The underlying principles of sound investment should not alter from decade to decade, but the application of these principles must be adapted to significant changes in the financial mechanisms and climate. Benjamin Graham
• If principles can become dated, they’re not principles. Warren Buffett 
• Occasionally, a man must rise above principles. Warren Buffet
• …it never ceases to amaze me to see how much territory can be grasped if one merely masters and consistently uses all the obvious and easily learned principles. Charlie Munger

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… and try to understand the rationale behind the rules 

• To achieve long-term success over many financial market and economic cycles, observing a few rules is not enough. Too many things change too quickly in the investment world for that approach to succeed. It is necessary instead to understand the rationale behind the rules in order to appreciate why they work when they do and don’t when they don’t. Seth Klarman

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Buy for the long term 

• When we own portions of outstanding businesses with outstanding managements, our favourite holding period is forever. Warren Buffett
• I never attempt to make money on the stock market. I buy on the assumption that they could close the market the next day and not reopen it for five years. As far as you are concerned, the stock market does not exist. Ignore it. Much success can be attributed to inactivity. Most investors cannot resist the temptation to constantly buy and sell. Warren Buffett
• We like to buy businesses; we don’t like to sell them. Warren Buffett
• We don’t get paid for activity, just for being right. As to how long we’ll wait, we’ll wait indefinitely. Warren Buffet
• Don’t own a stock for 10 minutes if you don’t plan to own it for 10 years. Warren Buffett
• Our favourite holding period is forever. Warren Buffett
• Only buy something that you’d be perfectly happy to hold if the market shut down for ten years. Warren Buffett
• If the job has been correctly done when a common stock is purchased, the time to sell it is almost never. Philip Fisher
• If you look carefully, almost all Old Money secrets can be traced to a single source: a longer- term outlook.  Bill Bonner
• If you own a wonderful business…the best thing to do is keep it. All you’re going to do is trade your wonderful business for a whole bunch of cash, which isn’t as good as the business, and you got the problem of investing in other businesses, and you probably paid a tax in between. So my advice to anybody who owns a wonderful business is keep it. Warren Buffett
• We buy expecting to hold a bond to maturity and a stock forever. Seth Klarman
• Investing is where you find a few great companies and then sit on your ass. Charlie Munger
• Balancing short termism with the long term thinking

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Make time for lots of independent thinking 

• None of this means, however, that a business or stock is an intelligent purchase simply because it is unpopular; a contrarian approach is just as foolish as a follow-the-crowd strategy. What’s required is thinking rather than polling. Unfortunately, Bertrand Russell’s observation about life in general applies with unusual force in the financial world: “Most men would rather die than think. Many do. Warren Buffet
• Invest a few moments in thinking. It will pay good interest.
• What you’re looking for is some way to get one good idea a year, and then ride it to its full potential. And that’s very hard to do in an environment where people are shouting prices back and forth every five minutes. Warren Buffett 
• Organized common (or uncommon) sense is an enormously powerful tool. There are huge dangers with computers. People calculate too much and think too little. Charlie Munger
• Warren and I insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think. So Warren and I do more reading and thinking and less doing than most people in business. Charlie Munger
• A public-opinion poll is no substitute for thought. Warren Buffet
• Set aside dedicated time to think

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Make time for thorough research and analysis 

• If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards. Peter Lynch 
• While some might mistakenly consider value investing a mechanical tool for identifying bargains, it is actually a comprehensive investment philosophy that emphasizes the need to perform in- depth fundamental analysis, pursue long- term investment results, limit risk, and resist crowd psychology. Seth Klarman
• The key is having more information than the other guy – then analysing it right and using it rationally. Warren Buffett 
• Research

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Focus heavily on facts and data… 

• We work really hard never to get confused with what we know from what we think or hope or wish. Seth Klarman
• I have no data yet. It is a capital mistake to theorise before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts. The Adventures of Sherlock Holmes
• It amazes me how people are often more willing to act based on little or no data than to use data that is a challenge to assemble. Robert J. Shiller
• A person infatuated with measurement, who has his head stuck in the sand of the balance sheets, is not likely to succeed. Peter Lynch
• Operations for profit should be based not on optimism but on arithmetic. Benjamin Graham
• Seek facts diligently, advice never. Philip Carret
• I stopped wasting time on what other people claimed a stock was worth and started looking at the numbers. Irving Kahn
• It sounds crazy but in times of turmoil in the market, I’ve felt serenity in knowing that if I checked and rechecked my work, one plus one still equals two regardless of where the stock trades after I bought it. Seth Klarman
• Facts

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… but realise investment is not purely empirical but also part art 

• We are not so brazen as to believe that we can perfectly calibrate valuation; determining risk and return for any investment remains an art not an exact science. Seth Klarman
• Investing is not a natural science but rather a social science. So, it’s never purely empirical; what you are trying to do is everything you possibly can to enhance your probabilities of being right more often than being wrong. William Browne
• Valuing a business is part art and part science. Warren Buffett 
• And finally, no matter how good the science gets, there are problems that inevitably depend on judgment, on art, on a feel for financial markets. Martin Feldstein
• The art of stock picking is more about synthesizing information across disciplines and making decisions than a strict devotion to finance. Allan Mecham
• Art,  Science

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Investment deals in probabilities, never certainties 

• We don’t deal in absolutes. We deal in probabilities. Seth Klarman
• Investing is not a natural science but rather a social science. So, it’s never purely empirical; what you are trying to do is everything you possibly can to enhance your probabilities of being right more often than being wrong. William Browne
• Even with a margin of safety in the investor’s favor, an individual security may work out badly. For the margin guarantees only that he has a better chance for profit than for loss – not that loss is impossible. But as the number of such commitments is increased the more certain does it become that the aggregate of the profits will exceed the aggregate of the losses. Benjamin Graham

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Follow a rational and thorough framework and process… 

• Be focused on process and not outcome. Seth Klarman
• Courage is a function of process. Seth Klarman
• All investors must come to terms with the relentless continuity of the investment process. Seth Klarman
• The way to maximize outcome is to focus on the process. Seth Klarman
• No wise pilot, no matter how great his talent and experience, fails to use his checklist. Charlie Munger
• You need a different checklist and different mental models for different companies. I can never make it easy by saying, ‘Here are three things.’ You have to derive it yourself to ingrain it in your head for the rest of your life. Charlie Munger
• Checklists turn out…to be among the basic tools of the quality and productivity revolution in aviation, engineering, construction – in virtually every field combining high risk and complexity. Checklists seem lowly and simplistic, but they help fill in for the gaps in our brains and between our brains. Atul Gawande
• You can’t be a good value investor without being an independent thinker – you’re seeing valuations that the market is not appreciating. But it’s critical that you understand why the market isn’t seeing the value you do. The back and forth that goes on in the investment process helps you get at that. Joel Greenblatt
• To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework. Warren Buffett

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… that is inherently simple … 

• I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities. Benjamin Graham
• The business schools reward difficult complex behavior more than simple behavior, but simple behavior is more effective. Warren Buffet
• All the math you need in the stock market you get in the fourth grade. Peter Lynch
• The simpler it is, the better I like it. Peter Lynch
• We try more to profit from always remembering the obvious than from grasping the esoteric. Charlie Munger
• There seems to be some perverse human characteristic that likes to make easy things difficult. Warren Buffet
• Take a simple idea and take it seriously. Charlie Munger
• Our ideas are so simple that people keep asking us for mysteries when all we have are the most elementary ideas. Charlie Munger
• Beware of geeks bearing formulas. Warren Buffett
• Simplicity,  Complexity

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… and be disciplined about applying it 

• The most important thing in this business is discipline. It isn’t brains. There are so many smart, educated people in this business. Arnold Van De Berg
• We don’t have to be smarter than the rest. We have to be more disciplined than the rest. Warren Buffett

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Sometimes you’ll need to make a decision with less than perfect knowledge 

• Investors frequently benefit from making decisions with less than perfect knowledge and are well rewarded for bearing the risk of uncertainty. The time other investors spend delving into the last unanswered detail may cost them the chance to buy into situations at prices so low they offer a margin of safety despite the incomplete information. Seth Klarman

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In your decisions, tune out what’s not important or unknowable 

• Part of having uncommon sense, I think, is being able to tune out folly, as distinguished from recognizing wisdom. You’ve got whole categories of things you just bat away so your brain isn’t cluttered with them. That way, you’re better able to pick up a few sensible things to do. Charles Munger
• Based on my own personal experience – both as an investor in recent years and an expert witness in years past – rarely do more than three or four variables really count. Everything else is noise. Marty Whitman
• What you really want to do in investments is figure out what’s important and knowable. If it’s unimportant or unknowable you forget about it. Warren Buffett
• Wisdom is the art of knowing what to overlook. William James
• Eliminate what is not important

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Use price fluctuations as an opportunity to buy and sell 

• Basically, 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 his dividend returns and to the operating results of his companies. Benjamin Graham
• Regarding a focus on daily price movements: “I don’t have a Bloomberg on my desk. I don’t care. Seth Klarman
• Don’t be scared of the ups and down. Don’t buy and sell. Don’t get trapped in that stuff. Don’t look at the newspaper everyday. Warren Buffett 
• Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it. Warren Buffet
• The most realistic distinction between the investor and the speculator is found in their attitude toward stock- market movements. The speculator’s primary interest lies in anticipating and profiting from market fluctuations. The investor’s primary interest lies in acquiring and holding suitable securities at suitable prices. Market movements are important to him in a practical sense, because they alternately create low price levels at which he would be wise to buy and high price levels at which he certainly should refrain from buying and probably would be wise to sell.  Benjamin Graham
• When an investor focuses on short-term investments, he or she is observing the variability of the portfolio, not the returns – in short, being fooled by randomness. Nassim Nicholas Taleb

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Here are thoughts on when to buy 

• The best thing that happens to us is when a great company gets into temporary trouble. We want to buy them when they’re on the operating table. Warren Buffett
• I will tell you the secret of getting rich on Wall Street. You try to be greedy when others are fearful and you try to be very fearful when others are greedy.  Warren Buffett
• The most common cause of low prices is pessimism – sometimes pervasive, sometimes specific to a company or industry. We want to do business in such an environment, not because we like pessimism but because we like the prices it produces. It’s optimism that is the enemy of the rational buyer. Warren Buffett 
• Berkshire buys when the lemmings are heading the other way. Warren Buffett
• Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well. Warren Buffett 
• Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down. Warren Buffet
• The time of maximum pessimism is the best time to buy and the time of maximum optimism is the best time to sell. John Templeton 
• The way to make money is to buy when blood is running in the streets. John D. Rockefeller
• Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell. John Templeton
• 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. Warren Buffet
• It’s good to buy a large company with fine businesses when the price is beaten down over worry about one problem. Henry Singleton
• Buy to the sound of cannons and sell to the sound of trumpets. Nathan Mayer Rothschild
• Buy when there’s blood in the streets, even if the blood is your own. Nathan Mayer Rothschild
• You must buy on the way down. There is far more volume on the way down than on the way back up, and far less competition among buyers. It is almost always better to be too early than too late, but you must be prepared for price markdowns on what you buy. Seth Klarman
• Buy when everyone else is selling and hold until everyone else is buying. That’s not just a catchy slogan. It’s the very essence of successful investing. Paul Getty
• Never buy at the bottom, and always sell too soon. Jesse L. Livermore

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Here are thoughts on when not to buy 

• You pay a very high price in the stock market for a cheery consensus. Uncertainty is the friend of the buyer of long- term values. Warren Buffett 
• The dumbest reason in the world to buy a stock is because it is going up. Warren Buffett
• Investors making purchases in an overheated market need to recognize that it may often take an extended period for the value of even an outstanding company to catch up with the price they paid. Warren Buffet
• Optimism is the enemy of the rational buyer. Warren Buffett 

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Here are thoughts on when to sell 

• There is always something to worry about. Avoid weekend thinking and ignore the latest dire predictions of the newscasters. Sell a stock because the company’s fundamentals deteriorate, not because the sky is falling. Peter Lynch
• Buying’s easier, selling’s hard – it’s hard to know when to get out. Seth Klarman
• Selling, in particular, can be a challenge; many investors are tempted to become more optimistic when a security is performing well. This temptation must be resisted; tax considerations aside, when a security reaches full valuation, there is no longer a reason to own it. Seth Klarman
• The near absence of bargains works as a reverse indicator for us. When we find there is little worth buying, there is probably much worth selling. Seth Klarman
• Nobody ever lost money taking a profit. Bernard Baruch

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Always remember you’re investing in an underlying business 

• If you can remember that stocks aren’t pieces of paper that gyrate all the time – they are fractional interests in businesses – it all makes sense. Seth Klarman
• All intelligent investing is value investing – acquiring more than you are paying for. You must value the business in order to value the stock. Charlie Munger
• I think you have to learn that there’s a company behind every stock, and that there’s only one real reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies. Peter Lynch
• Behind every stock is a company. Find out what it’s doing. Peter Lynch
• Stocks aren’t lottery tickets. There’s a company attached to every share. Peter Lynch
• In the long run, investing is not about markets at all. Investing is about enjoying the returns earned by businesses. John Bogle
• The number one idea is to view a stock as an ownership of the business and to judge the staying quality of the business in terms of its competitive advantage. Look for more value in terms of discounted future cash- flow than you are paying for. Move only when you have an advantage. Charlie Munger

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Learn how to value that business 

• Indeed, if you aren’t certain that you understand and can value your business far better than Mr Market, you don’t belong in the game. Warren Buffett 
• Price is what you pay, value is what you get. Warren Buffett 
• The inescapable fact is that the value of an asset, whatever it’s character, cannot over the long term grow faster than its earnings. Warren Buffett 
• If a company’s future cannot be predicted, it cannot be valued. Warren Buffett
• Valuing a business is part art and part science. Warren Buffett 
• The stock market is filled with individuals who know the price of everything, but the value of nothing. Phil Fisher
• The value of a business is the cash it’s going to produce in the future. Warren Buffett
• All intelligent investing is value investing – acquiring more than you are paying for. You must value the business in order to value the stock. Charlie Munger
• Book value is an accounting concept, recording the accumulated financial input from both contributed capital and retained earnings. Intrinsic business value is an economic concept, estimating future cash output discounted to present value. Book value tells you what has been put in; intrinsic business value estimates what can be taken out. Warren Buffett
• The secret to investing is to figure out the value of something – and then pay a lot less. Joel Greenblatt
• There’s no such thing as a value company. Price is all that matters. At some price, an asset is a buy, at another it’s a hold, and at another it’s a sell. Seth Klarman

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Look for outstanding businesses at fair prices 

• Time is the friend of the wonderful business, the enemy of the mediocre. It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price. When buying companies or common stocks, we look for first-  class businesses accompanied by first class managements. That leads right into a related lesson: Good jockeys will do well on good horses but not on broken down nags.   Warren Buffett 
• A great business at a fair price is superior to a fair business at a great price. Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause the stock to be misappraised. Warren Buffett 
• It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price. I would rather be certain of a good result than hopeful of a great one. Warren Buffett
• Our goal is to find an outstanding business at a sensible price, not a mediocre business at a bargain price. Warren Buffett
• When buying shares, ask yourself, would you buy the whole company? Rene Rivkin
• Time is the friend of the wonderful business. It’s the enemy of the lousy business. If you’re in a lousy business for a long time, you’re going to get a lousy result, even if you buy it cheap. If you’re in a wonderful business for a long time, even if you pay a little too much going in, you’re going to get a wonderful result if you stay in a long time. Warren Buffett
• Time is on your side when you own shares of superior companies. Peter Lynch
• A lot of great fortunes in the world have been made by owning a single wonderful business. If you understand the business, you don’t need to own very many of them. Warren Buffett
• Why not invest your assets in the companies you really like? As Mae West said, “Too much of a good thing can be wonderful.” Warren Buffet
• A great business at a fair price is superior to a fair business at a great price. Charlie Munger

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Stay clear of poor businesses 

• Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks. Warren Buffett
• When a management with a reputation for brilliance tackles a business with a reputation for poor fundamental economics, it is the reputation of the business that remains intact. Warren Buffett

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Here are thoughts on what makes an outstanding business 

• The ability to raise prices – the ability to differentiate yourself in a real way, and a real way means you can charge a different price – makes a great business. Warren Buffett 
• We select our marketable equity securities in much the same way we would evaluate a business for acquisition in it’s entirety. We want the business to be one a) that we understand b) with favourable long-term prosects c) operated by honest and competent people and d) available at a very attractive price. Warren Buffett 
• Our investments continue to be few in number and simple in concept: The truly big investment idea can usually be explained in a short paragraph. We like a business with enduring competitive advantages that is run by able and owner- oriented people. When these attributes exist, and when we can make purchases at sensible prices, it is hard to go wrong (a challenge we periodically manage to overcome). Warren Buffet
• The ideal business is one that earns very high returns on capital and that keeps using lots of capital at those high returns. That becomes a compounding machine. Warren Buffett
• Go for a business that any idiot can run – because sooner or later, any idiot probably is going to run it. Peter Lynch
• The way to look at a business is, “Is this going to keep producing more, and more, and more money over time?” And if the answer to that is yes, you don’t need to ask any more questions. Warren Buffett
• Time is the enemy of the poor business and the friend of the great business. If you have a business that’s earning 20%- 25% on equity, time is your friend. But time is your enemy if your money is in a low return business. Warren Buffett
• Businesses that earn a high return on capital are better than businesses that earn a low return on capital. Joel Greenblatt

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The stock of successful companies will always rise over the long term 

• Often, there is no correlation between the success of a company’s operations and the success of its stock over a few months or even a few years. In the long term, there is a 100 percent correlation between the success of the company and the success of its stock. This disparity is the key to making money; it pays to be patient, and to own successful companies. Peter Lynch
• If a business does well, the stock eventually follows. Warren Buffet

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Remain patient, realising that markets can remain irrational for long periods …

• Markets can remain irrational longer than you can remain solvent. John Maynard Keynes
• Undervaluations caused by neglect or prejudice may persist for an inconveniently long time, and the same applies to inflated prices caused by over-enthusiasm or artificial stimulants. Ben Graham
• Patience

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… but be fully prepared to pounce when a big opportunity arises 

• It takes character to sit there with all that cash and do nothing. I didn’t get to where I am by going after mediocre opportunities. Charlie Munger
• Be prepared, act promptly, in scale, on a few major opportunities. Charlie Munger
• Our game is to recognize a big idea when it comes along, when it doesn’t come along very often. Opportunity comes to the prepared mind. Charlie Munger
• Genius is nothing but a greater aptitude for patience. Georges-Louis Buffon
• Time is your friend; impulse is your enemy. Jack Bogle
• If you took our top fifteen decisions out, we’d have a pretty average record. It wasn’t hyperactivity, but a hell of a lot of patience. You stuck to your principles and when opportunities came along you pounced on them with vigor. Charlie Munger
• Our experience tends to confirm a long-held notion that being prepared, on a few occasions in a lifetime, to act promptly in scale, in doing some simple and logical thing, will often dramatically improve the financial results of that lifetime. A few major opportunities, clearly recognizable as such, will usually come to one who continuously searches and waits, with a curious mind that loves diagnosis involving multiple variables. And then all that is required is a willingness to bet heavily when the odds are extremely favorable, using resources available as a result of prudence and patience in the past. Charlie Munger
• If you can’t find any companies that you think are attractive, put your money in the bank until you discover some. Peter Lynch
• Chance favors only the prepared mind. Louis Pasteur
• More important than the will to win is the will to prepare. Charlie Munger
• You can’t predict, but you can prepare. Howard Marks
• Money grows on the tree of patience. Proverb
• Opportunity,  Proactiveness

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Doing very little is often the most profitable thing you can do 

• The trick is, when there is nothing to do, do nothing. Warren Buffett
• The stock market is a no called strike game. You don’t have to swing at everything – you can wait for your pitch. The problem when you’re a money manager is that your fans keep yelling, ‘Swing you bum’. Warren Buffett 
• Doing very little is more profitable. Warren Buffett 
• There is also another alternative: Don’t do anything. More fortunes are made by sitting on good securities for years at a time than by active trading. Warren Buffett 
• We don’t get paid for being busy, we get paid for being right. Warren Buffett 
• It was never my thinking that made the big money. It was always my sitting. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. Jesse Livermore
• The disadvantage of being in any kind of a market type environment – and Wall Street would be the extreme – is that you get over stimulated. You think you have to do something every day. Warren Buffett
• Activity is the enemy of investment returns. Warren Buffett
• With a profession such as investing, people see the ‘doing’ as the buying and selling. It is difficult to come home from work, and answer your spouse’s question, ‘what did you do today?’ with ‘well, I read a lot, and I talked a little.’ If you’re not buying or selling, you may feel you aren’t doing anything. David Abrams
• I call investing the greatest business in the world because you never have to swing. You stand at the plate, the pitcher throws you General Motors at 47! U.S.Steel at 39! and nobody calls a strike on you. There’s no penalty except opportunity lost. All day you wait for the pitch you like; then when the fielders are asleep, you step up and hit it. Warren Buffet
• It takes character to sit there with all that cash and do nothing. I didn’t get to where I am by going after mediocre opportunities. Charlie Munger
• There are worse situations than drowning in cash and sitting, sitting, sitting. I remember when I wasn’t awash in cash — and I don’t want to go back. Charlie Munger
• As tempting as it may be to be a ‘man of action,’ it often makes more sense to act only at the extremes. But the discipline required to ‘do nothing’ for long periods of time is not often seen. James Montier
• The stock market serves as a relocation centre at which money is moved from the active to the patient. Warren Buffett 
• If most traders would learn to sit on their hands 50% of the time, they would make a lot more money. Bill Lipschutz

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Realise good investing isn’t about constant excitement 

• Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas. Paul Samuelson
• If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring. George Soros
• Investors should remember that excitement and expenses are their enemies. Warren Buffet
• Investing is fun, exciting, and dangerous if you don’t do any work. Peter Lynch
• Beware the investment activity that produces applause; the great moves are usually greeted by yawns. Warren Buffett
• Value stocks are about as exciting as watching grass grow. But have you ever noticed how much your grass grows in a week? Christopher H. Browne
• Excitement

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To find good investments, be prepared to look long and hard 

• Searching for companies is like looking for grubs under rocks: if you turn over 10 rocks you’ll likely find one grub; if you turn over 20 rocks you’ll find two. Peter Lynch
• The person that turns over the most rocks wins the game. And that’s always been my philosophy. Peter Lynch
• You have to turn over a lot of rocks to find those little anomalies. You have to find the companies that are off the map – way off the map. Warren Buffett
• You don’t have to be the smartest analyst, you just have to be the most dogged. Michael Burry

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Stay investing in your circle of competence… 

• Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world. Charlie Munger
• Stay investing in your circle of competence. Warren Buffett
• Everybody’s got a different circle of competence. The important thing is not how big the circle is. The important thing is staying inside the circle. Warren Buffett
• If we have a strength, it is in recognizing when we are operating well within our circle of competence and when we are approaching the perimeter. Warren Buffett
• There are all kinds of businesses that Charlie and I don’t understand, but that doesn’t cause us to stay up at night. It just means we go on to the next one, and that’s what the individual investor should do. Warren Buffet

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… and always understand what you’re investing in 

• Value investors will not invest in businesses that they cannot readily understand or ones they find excessively risky. Hence few value investors will own the shares of technology companies. Many also shun commercial banks, which they consider to have unanalyzable assets, as well as property and casualty insurance companies, which have both unanalyzable assets and liabilities. Seth Klarman
• A lot of great fortunes in the world have been made by owning a single wonderful business. If you understand the business, you don’t need to own very many of them. Warren Buffett
• It’s better to do nothing with your money than something you don’t understand. Suze Orman

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Do not fixate on market timing… 

• I don’t believe all this nonsense about market timing. Just buy good value and when the market is ready that value will be recognized. Henry Singleton
• Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy when others are fearful. Warren Buffet
• You know, you never get the high and you never get the low. Walter Schloss
• The future is uncertain; it is always a difficult time to invest. John Griffin
• I never ask if the market is going to go up or down because I don’t know, and besides it doesn’t matter. I search nation after nation for stocks, asking: ‘Where is the one that is lowest-priced in relation to what I believe it’s worth?’ Forty years of experience have taught me you can make money without ever knowing which way the market is going. John Templeton

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… or try to forecast the market or economy for the future is never clear 

• Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future. Warren Buffett
• I have never met a man who could forecast the market. Warren Buffett 
• We do not have, never have had, and never will have an opinion about where the stockmarket, interest rates, or business activity will be a year from now. Warren Buffett
• The only value of stock forecasters is to make fortune tellers look good. Warren Buffett
• We have two kinds of forecasters, those who don’t know and those who don’t know they don’t know. John Kenneth Galbraith
• We will continue to ignore political and economic forecasts, which are an expensive distraction for many investors and businessmen. Warren Buffet
• In the business world, the rear view mirror is always clearer than the windshield. Warren Buffett
• There are 60,000 economists in the U.S., many of them employed full-time trying to forecast recessions and interest rates, and if they could do it successfully twice in a row, they’d all be millionaires by now…as far as I know, most of them are still gainfully employed, which ought to tell us something. Peter Lynch
• The financial markets generally are unpredictable. So that one has to have different scenarios. The idea that you can actually predict what’s going to happen contradicts my way of looking at the market. George Soros
• Pundits forecast not because they know, but because they are asked. John Kenneth Galbraith
• No one can foresee the consequences of trivia and accident, and for that reason alone, the future will forever be filled with surprises. Dan Gardner
• You can’t predict, but you can prepare. Howard Marks
• The fact that people will be full of greed, fear or folly is predictable. The sequence is not predictable. Warren Buffet
• The future is never clear, and you pay a very high price in the stock market for a cheery consensus. Warren Buffet
• People have always had this craving to have someone tell them the future. Long ago, kings would hire people to read sheep guts.  There’s always been a market for people who pretend to know the future.  Listening to today’s forecasters is just as crazy as when the king hired the guy to look at the sheep guts.  It happens over and over and over.  Charlie Munger
• Those who have knowledge don’t predict. Those who predict don’t have knowledge. Lao Tzu

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Don’t rely too much on the past either 

• History does not tell you the probability of future financial things happening. Warren Buffett
• If past history was all there was to the game, the richest people would be librarians. Warren Buffet

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• Risk comes from not knowing what you are doing. Warren Buffett
• If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks. John Bogle
• Investors should always keep in mind that the most important metric is not the returns achieved but the returns weighed against the risks incurred. Ultimately, nothing should be more important to investors than the ability to sleep soundly at night. Seth Klarman
• Risk is what’s left over when you think you’ve thought of everything. Carl Richards
• Being slow and steady means that you’re willing to exchange the opportunity of making a killing for the assurance of never getting killed. Carl Richards
• Do not trust financial market risk models. Despite the predilection of some analysts to model the financial markets using sophisticated mathematics, the markets are governed by behavioral science, not physical science. Seth Klarman
• Risk means more things can happen than will happen. Peter Bernstein
• We like investments where the risk is time, not price. Richard Chandler
• Uncertainty is the friend of the buyer of long-term values. Warren Buffet
• The best protection against risk is knowing what you are doing. Seth Klarman
• Nowhere does it say that investors should strive to make every last dollar of potential profit; consideration of risk must never take a backseat to return. Seth Klarman
• Risk is not inherent in an investment; it is always relative to the price paid. Uncertainty is not the same as risk. Indeed, when great uncertainty – such as in the fall of 2008 – drives securities prices to especially low levels, they often become less risky investments. Seth Klarman
• Nothing’s more risky than a widespread belief that there’s no risk. Howard Marks
• It is what you know that is your greatest wealth. It is what you do not know that is your greatest risk. Robert T. Kiyosaki
• In investing money the amount of interest you want should depend on whether you want to eat well or sleep well. J. Kenfield Morley

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Understand market psychology and its swings in mood 

• I will tell you the secret of getting rich on Wall Street. You try to be greedy when others are fearful and you try to be very fearful when others are greedy.  Warren Buffett
• Investing is about the study of human nature. Warren Buffett 
• The market is a manic depressive. That’s why you can’t buy and sell on it’s terms. You have to buy and sell when you want to. Warren Buffett 
• The sillier the market’s behavior, the greater the opportunity for the business-like investor. Warren Buffett
• The stock market is the story of cycles and of the human behavior that is responsible for overreactions in both directions. Seth Klarman
• Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one. Charles Mackay
• For forty years I’ve seen the manic-depressive cycle of investor psychology swing crazily: between fear and greed – we all know the refrain – but also between optimism and pessimism, and between credulity and skepticism. In general, following the beliefs of the herd – and swinging with the pendulum – will give you average performance in the long run and can get you killed at the extremes. Howard Marks
• Every once in a while, the market does something so stupid it takes your breath away. Jim Cramer
• …in the economic/investment world, what matters most in the short run isn’t necessarily what’s true but, rather, what’s on people’s minds. Howard Marks

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Learn to control your emotions – for if you don’t, you won’t be able to control your money 

• If you cannot control your emotions, you cannot control your money. Warren Buffett 
• Individuals who cannot master their emotions are ill-suited to profit from the investment process. Benjamin Graham
• Everyone has the brainpower to make money in stocks. Not everyone has the stomach. If you are susceptible to selling everything in a panic, you ought to avoid stocks and mutual funds altogether. Peter Lynch
• If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks. John Bogle
• An investor’s worst enemy is not the stock market but his own emotions.
• The key to making money in stocks is not to get scared out of them. Peter Lynch
• Great investors are not unemotional but are inversely emotional – they get worried when the market is up and feel good when everyone is worried. Bill Miller
• The most important quality for an investor is temperament, not intellect… You need a temperament that neither derives great pleasure from being with the crowd or against the crowd. Warren Buffet
• People struggle financially because they cannot control their emotion of fear. Robert T. Kiyosaki
• What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework. Warren Buffett
• An investor will succeed by coupling good business judgement with an ability to insulate his thoughts and behaviour from the super- contagious emotions that swirl about the marketplace. Warren Buffett 
• The investor’s chief problem — even his worst enemy — is likely to be himself. Benjamin Graham
• Emotions

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Realise there are times when you’ll need courage 

• In the world of securities, courage becomes the supreme virtue after adequate knowledge and a tested judgment are at hand. Benjamin Graham
• Cash combined with courage in a time of crisis is priceless. Warren Buffett
• Investors need cash and courage, and courage is a function of process. Seth Klarman
• It requires a great deal of boldness and a great deal of caution to make a great fortune, and when you have it, it requires ten times as much skill to keep it. Ralph Waldo Emerson
• Courage

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Accept that there will be market declines 

• A stock market decline is as routine as a January blizzard in Colorado. If you’re prepared, it can’t hurt you. A decline is a great opportunity to pick up the bargains left behind by investors who are fleeing the storm in panic. Peter Lynch
• You get recessions, you have stock market declines. If you don’t understand that’s going to happen, then you’re not ready, you won’t do well in the markets. Peter Lynch

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Do not over-diversify 

• We think diversification, as practiced generally, makes very little sense for anyone who knows what they are doing. Diversification serves as protection against ignorance. Warren Buffett 
• We don’t get into things we don’t understand. We buy very few things, but we buy very big positions. Know what you own, own a few and buy a lot. Warren Buffett 
• The way to become rich is to put all your eggs in one basket and then watch that basket. Andrew Carnegie
• A lot of great fortunes in the world have been made by owning a single wonderful business. If you understand the business, you don’t need to own very many of them. Warren Buffett
• The strategy we’ve adopted precludes our following standard diversification dogma. Many pundits would therefore say the strategy must be riskier than that employed by more conventional investors. We disagree. We believe that a policy of portfolio concentration may well decrease risk if it raises, as it should, both the intensity with which an investor thinks about a business and the comfort-level he must feel with its economic characteristics before buying into it. Warren Buffett
• Wide diversification is only required when investors do not understand what they are doing. Warren Buffett
• Owning stocks is like having children — don’t get involved with more than you can handle. Peter Lynch
• It just seems logical that sticking to investing in only a small number of companies that you understand well, rather than moving down the list to your thirtieth or fiftieth favorite pick, would create a much greater potential to earn above- average investment returns.  Joel Greenblatt
• We believe that a policy of portfolio concentration may well decrease risk if it raises, as it should, both the intensity with which an investor thinks about a business and the comfort level he must feel with its economic characteristics before buying into it. Warren Buffett
• With each investment you make, you should have the courage and the conviction to place at least 10 percent of your net worth in that stock. Warren Buffett
• By buying big – going narrow and deep, as opposed to a diversifying – you maximize your successes. Richard Chandler
• Diversification is a protection against ignorance. It makes very little sense for those who know what they’re doing. Warren Buffet
• The first thing I learned is when times are tough, you need to hedge your bets – you need to diversify. Donald Trump

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Don’t blindly follow the herd… 

• If you want to have a better performance than the crowd, you must do things differently from the crowd. John Templeton
• Value investing is at its core the marriage of a contrarian streak and a calculator. Seth Klarman
• The central principle of investment is to go contrary to the general opinion, on the grounds that if everyone agreed about its merits, the investment is inevitably too dear and therefore unattractive. M. Keynes
• If everyone thinks one way, it is likely to be wrong. If you can figure out that it is wrong, you are likely to make a lot of money. Jim Rogers
• Experience teaches us that when “everyone” comes to the same conclusion, that conclusion is just about always wrong. David Dreman
• Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one. Charles Mackay
• A public-opinion poll is no substitute for thought. Warren Buffet
• Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. Warren Buffet
• You’re neither right nor wrong because other people agree with you. You’re right because your facts are right and your reasoning is right—and that’s the only thing that makes you right. And if your facts and reasoning are right, you don’t have to worry about anybody else. Warren Buffet
• Over the long run, the crowd is always wrong. Seth Klarman
• The strategy of buying what’s in favor is a fool’s errand, ensuring long-term underperformance. Only by standing against the prevailing winds – selectively, but resolutely – can an investor prosper over time. But for a while, a value investor typically underperforms. Seth Klarman
• Berkshire buys when the lemmings are heading the other way. Warren Buffett
• Conformity

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… especially if you want to outperform… 

• Short-term performance envy causes many of the shortcomings that lock most investors into a perpetual cycle of underachievement. Watch your competitors not out of jealousy but out of respect and focus your efforts not on replicating others’ portfolios but on looking for opportunities where they are not. The only way for investors to significantly outperform is to periodically stand far apart from the crowd, something few are willing, or able, to do. Seth Klarman
• For forty years I’ve seen the manic-depressive cycle of investor psychology swing crazily: between fear and greed – we all know the refrain – but also between optimism and pessimism, and between credulity and skepticism. In general, following the beliefs of the herd – and swinging with the pendulum – will give you average performance in the long run and can get you killed at the extremes. Howard Marks
• You can’t buy what is popular and do well. Warren Buffet
• The lesson of Buffet is, to succeed in a spectacular fashion you have to be spectacularly unusual. Mike Burry

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… but realise that going against conventional wisdom takes courage 

• The hardest thing over the years has been having the courage to go against the dominant wisdom of the time to have a view that is at variance with the present consensus and bet that view. The hard part is that the investor must measure himself not by his own perceptions of his performance, but by the objective measure of the market. The market has its own reality. In an immediate emotional sense the market is always right so if you take a variant point of view you will always be bombarded for some time by conventional wisdom as expressed by the market. Michael Steinhardt
• It is always easiest to run with the herd; at times, it can take a deep reservoir of courage and conviction to stand apart from it. Yet distancing yourself from the crowd is an essential component of long-term investment success. Seth Klarman

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Don’t compare yourself to other investors 

• Here’s one truth that perhaps your typical investment counselor would disagree with: if you’re comfortably rich and someone else is getting richer faster than you by, for example, investing in risky stocks, so what?! Someone will always be getting richer faster than you. This is not a tragedy. Charlie Munger
• Comparison

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Avoid making big or stupid mistakes… 

• An investor needs to do very few things right as long as he or she avoids big mistakes. Warren Buffett
• What the wise man does in the beginning, the fool does in the end. Warren Buffett
• It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent. Charlie Munger
• The first principle is that you must not fool yourself, and you are the easiest person to fool. Richard Feynman
• The dumbest reason in the world to buy a stock is because it’s going up. Warren Buffett
• Investors do not make mistakes, or bad mistakes, in buying good stocks as fair prices. They make their most serious mistakes by buying poor stocks, particularly the ones that are pushed for various reasons. And sometimes – in fact, very frequently – they make mistakes by buying good stocks in the upper reaches of a bull market. Ben Graham 

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… and learn from your mistakes when you make them 

• I’m only rich because I know when I’m wrong…I basically have survived by recognizing my mistakes. George Soros
• Wall Street people learn nothing and forget everything. Benjamin Graham
• Learning,   Mistakes

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Read a great deal 

• If it is wisdom you’re after, you’re going to spend a lot of time on your ass reading. Charlie Munger
• In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time — none, zero… You’d be amazed at how much Warren reads — at how much I read. My children laugh at me. They think I’m a book with a couple of legs sticking out. Charlie Munger
• Warren and I insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think. So Warren and I do more reading and thinking and less doing than most people in business. Charlie Munger
• I’ve learned mainly by reading myself. So I don’t think I have any original ideas. Certainly, I talk about reading Graham. I’ve read Phil Fisher. So I’ve gotten a lot of my ideas from reading. You can learn a lot from other people. In fact, I think if you learn basically from other people, you don’t have to get too many new ideas on your own. You can just apply the best of what you see. Warren Buffett
• Never stop reading. History doesn’t repeat, but it does rhyme. Seth Klarman
• The man who doesn’t read good books has no advantage over the man who can’t. Mark Twain
• Unless you have read and absorbed the best that can be read and absorbed, you will not think clearly or well. Harold Bloom
• Reading

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Stay intensely curious 

• You need to have a passionate interest in why thing are happening. That cast of mind, kept over long periods, gradually improves your ability to focus on reality. If you don’t have that cast of mind your destined for failure even if you have a high I.Q. Charlie Munger
• Curiosity

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Good investment is all about good judgment … 

• Value investing is not a paint-by-numbers exercise. Skepticism and judgment are always required. Seth Klarman
• An investor will succeed by coupling good business judgement with an ability to insulate his thoughts and behaviour from the super- contagious emotions that swirl about the marketplace. Warren Buffett 
• In the world of securities, courage becomes the supreme virtue after adequate knowledge and a tested judgment are at hand. Benjamin Graham
• Wisdom,  Common sense

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… and being right more often than wrong 

• In this business if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten. Peter Lynch
• There’s no shame in losing money on a stock. Everybody does it. What is shameful is to hold on to a stock, or, worse, to buy more of it, when the fundamentals are deteriorating. Peter Lynch
• If we decide we are wrong about something, we exit. Period. David Einhorn
• It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong. George Soros
• Successful investors must temper the arrogance of taking a stand with a large dose of humility, accepting that despite their efforts and care, they may in fact be wrong. Seth Klarman
• You only have to do a very few things right in your life so long as you don’t do too many things wrong. Warren Buffet
• You’re neither right nor wrong because other people agree with you. You’re right because your facts are right. Warren Buffet
• It is better to be vaguely right than exactly wrong. Carveth Read
• We don’t get paid for being busy, we get paid for being right. Warren Buffett 
• What if I am wrong? Any rational investment plan has to start with that question. Peter L. Bernstein
• Amateurs want to be right. Professionals want to make money.

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Always be able to explain to yourself exactly why you’re investing in a particular business 

• If you’re prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won’t get bored. Peter Lynch
• Never invest in any idea you can’t illustrate with a crayon. Peter Lynch
• You ought to be able to explain why you’re taking the job you’re taking, why you’re making the investment you’re making, or whatever it may be. And if it can’t stand applying pencil to paper, you’d better think it through some more. And if you can’t write an intelligent answer to those questions, don’t do it. Warren Buffet
• I never buy anything unless I can fill out on a piece of paper my reasons. I may be wrong, but I would know the answer to that. “I’m paying $32 billion today for the Coca Cola Company because…” If you can’t answer that question, you shouldn’t buy it. If you can answer that question, and you do it a few times, you’ll make a lot of money. Warren Buffet
• There’s a clarity that comes with great ideas: You can easily and simply explain why something’s a great business, how and why it’s cheap, why it’s cheap for temporary reasons and how, on a normal basis, it should be trading at a much higher level. You’re never sitting there on the 40th page of your spreadsheet, as Buffett would say, agonizing over whether you should buy or not. Joel Greenblatt
• You have to know what you own, and why you own it. “This baby is a cinch to go up!” doesn’t count. Peter Lynch

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Be cautious, never impulsive 

• I always start investing from a position of fear. Warren Buffett
• We are big fans of fear, and in investing it is clearly better to be scared than sorry. Seth Klarman
• What if I am wrong? Any rational investment plan has to start with that question. Peter L. Bernstein
• Time is your friend; impulse is your enemy. Jack Bogle
• Caution

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Don’t put undue faith in the experts 

• I never talk to brokers or analysts. Wall Street is the only place that people who ride to work in a Rolls Royce get advice from those who take the subway. Warren Buffett
• If stock market experts were so expert, they would be buying stock, not selling advice. Norman R. Augustine
• Never ask a barber if you need a haircut. Warren Buffett
• Twenty years in this business convinces me that any normal person using the customary three percent of the brain can pick stocks just as well, if not better, than the average Wall Street expert. Peter Lynch
• Your investor’s edge is not something you get from Wall Street experts. It’s something you already have. You can outperform the experts if you use your edge by investing in companies or industries you already understand. Peter Lynch
• The returns among all active managers engaged in picking large stocks is no better than if they were flipping coins to help them make their selections. Brent Kessel
• Expertise

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Closely follow the companies you invest in 

• Most businesses change in character and quality over the years, sometimes for the better, perhaps more often for the worse. The investor need not watch his companies’ performance like a hawk; but he should give it a good, hard look from time to time. Benjamin Graham
• The way to become rich is to put all your eggs in one basket and then watch that basket. Andrew Carnegie
• The best stock to buy is the one you already own. Peter Lynch

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More keys to success in investing 

• The key is having more information than the other guy – then analysing it right and using it rationally. Warren Buffett 
• One lesson is not to overly fixate on what you have paid for a stock, the second is not to rush unthinkingly and grab a small profit. Warren Buffett 
• In my opinion, investment success will not be produced by arcane formulae, computer programs or signals flashed by the price behaviour of stocks and markets. Rather an investor will succeed by coupling good business judgement with an ability to insulate his thoughts and behaviour from the super- contagious emotions that swirl about the marketplace. Warren Buffett 
• Don’t be scared of the ups and down. Don’t buy and sell. Don’t get trapped in that stuff. Don’t look at the newspaper everyday. Warren Buffett 
• All there is to investing is picking good stocks at good times and staying with them as long as they remain good companies. Warren Buffett 
• Know what you own and know why you own it. Peter Lynch
• Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily- understandable business who’s earnings are virtually certain to be materially higher five, ten and twenty years from now. Warren Buffett
• Investment must be rational, if you can’t understand it don’t do it. Warren Buffett 
• The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage. Warren Buffett
• To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework. Warren Buffett

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Speculation and investment are very different approaches 

• Investment is an activity of forecasting the yield on assets over the life of the asset. Speculation is the activity of forecasting the psychology of the market. Warren Buffett 
• Speculation is an effort, probably unsuccessful, to turn a little money into a lot. Investment is an effort, which should be successful, to prevent a lot of money from becoming a little. Fred Schwed Jr.
• If you’re an investor, you’re looking at what the asset – in our case, businesses – will do. If you’re a speculator, you’re primarily forecasting on what the price will do independent of the business. Warren Buffett
• Investing is an activity of forecasting the yield over the life of an asset while speculation is the activity of forecasting the psychology of the market. John Maynard Keynes
• A speculator is one who runs risks of which he is aware, and an investor is one who runs risks of which he is unaware. John Maynard Keynes

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Thoughts on speculation 

• Speculation is most dangerous when it looks easiest. Warren Buffett 
• The individual investor should act consistently as an investor and not as a speculator. The individual investor should act consistently as an investor and not as a speculator. This means that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money’s worth for his purchase.  Ben Graham
• As a speculator you must embrace disorder and chaos. Louis Bacon
• The line separating investment and speculation, which is never bright and clear, becomes blurred still further when most market participants have recently enjoyed triumphs. Nothing sedates rationality like large doses of effortless money. After a heady experience of that kind, normally sensible people drift into behavior akin to that of Cinderella at the ball. They know that overstaying the festivities ¾ that is, continuing to speculate in companies that have gigantic valuations relative to the cash they are likely to generate in the future ¾ will eventually bring on pumpkins and mice. But they nevertheless hate to miss a single minute of what is one helluva party. Therefore, the giddy participants all plan to leave just seconds before midnight. There’s a problem, though: They are dancing in a room in which the clocks have no hands. Warren Buffet
• Markets are constantly in a state of uncertainty and flux and money is made by discounting the obvious and betting on the unexpected. George Soros
• Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble… to give way to hope, fear and greed. Benjamin Graham
• There are two times in a man’s life when he shouldn’t speculate: when he can afford to and when he can’t. Mark Twain
• The speculative urge that lies within us is strong; the prospect of a free lunch can be compelling, especially when others have already seemingly partaken. It can be hard to concentrate on potential losses while others are greedily reaching for gains and your broker is on the phone offering shares in the latest “hot” initial public offering.  Yet the avoidance of loss is the surest way to ensure a profitable outcome.  A loss-avoidance strategy is at odds with recent conventional market wisdom.  Today many people believe that the risk comes, not from owning stocks, but from not owning them.  Seth Klarman

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Invest in yourself and your knowledge and skills most of all 

• I constantly encourage people to invest more in their financial education than in stocks, real estate, or other markets. The smarter you are, the better chance you have of beating the odds. Robert T.  Kiyosaki
• The greatest stock market you can invest in is yourself. Finding this truth is better than finding a gold mine. Byron Katie
• Consider the money you spend as an investment in yourself: you are buying stock in a company you believe in, you recognize your vast potential, and you want to get in on the ground floor of your achievements. Alan Cohen
• If money is your hope for independence you will never have it. The only real security that a man will have in this world is a reserve of knowledge, experience, and ability. Henry Ford
• This is the single most powerful investment we can ever make in life— investment in ourselves, in the only instrument we have with which to deal with life and to contribute. Stephen Covey
• If I had $5000 to spend on self-improvement, how would I spend it? Ramit Sethi
• If a man empties his purse into his head, no man can take it away from him. An investment in knowledge always pays the best interest. Benjamin Franklin
• You are the root of your financial success or failure. If you work on the roots, the “fruits” will take care of themselves. Harv Eker
• Your most valuable currency is what comes most naturally to you. Cash in. Danielle LaPorta
• Invest in yourself. Your career is the engine of your wealth. Paul Clitheroe

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Beware of bubbles 

• Unfortunately, the hangover may prove to be proportional to the binge. Warren Buffet
• Like most trends, at the beginning it’s driven by fundamentals, at some point speculation takes over. What the wise man does in the beginning, the fool does in the end. Warren Buffet
• The world went mad. What we learn from history is that people don’t learn from history. Warren Buffet
• Stock market bubbles don’t grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception. George Soros

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Thoughts on money market accounts 

• How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case. Robert G. Allen
• In the long run, a portfolio of well chosen stocks and/or equity mutual funds will always outperform a portfolio of bonds or a money- market account. In the long run, a portfolio of poorly chosen stocks won’t outperform the money left under the mattress. Peter Lynch

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Thoughts on derivatives 

• We’ve used derivatives for many, many years. I don’t think derivatives are evil, per se, I think they are dangerous. …So we use lots of things daily that are dangerous, but we generally pay some attention to how they’re used. We tell the cars how fast they can go.   Warren Buffett
• Derivatives are financial weapons of mass destruction. Warren Buffett

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Thoughts on commodities 

• A commodity doesn’t have the same characteristics as a security, characteristics that allow for analysis. Other than a recent sale or appreciation due to inflation, analyzing the current or future worth of a commodity is nearly impossible. Seth Klarman

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Some general rules of thumb 

• Dividend increases are a sign that companies are comfortable their future profit will be resilient. Tom Connolly
• Stock price movements actually begin to reflect new developments before it is generally recognized that they have taken place. Arthur Zeikel

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If you don’t want to make your own investment decisions, go with an index fund 

• The returns among all active managers engaged in picking large stocks is no better than if they were flipping coins to help them make their selections. Brent Kessel
• The typical US investor in mutual funds from 1987-2006 grew $10,000 to $23,252, while a $10,000 investment in the S&P500 would’ve grown to $93,050 in the same time. Brent Kessel
• A 1 percent increase in costs could require you to work an extra five years before retiring. Brent Kessel
• Our standard prescription for the know-nothing investor with a long-term time horizon is a no- load index fund. I think that works better than relying on your stock broker. The people who are telling you to do something else are all being paid by commissions or fees. The result is that while index fund investing is becoming more and more popular, by and large it’s not the individual investors that are doing it. It’s the institutions. Charlie Munger
• Stock brokers, in toto, will do so poorly that the index fund will do better. Charlie Munger

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More thoughts on investing 

• In the short run, the market is a voting machine. In the long run, it’s a weighing machine. Warren Buffett
• Would you believe that a few decades back they were growing shrimp at Coke and exploring for oil at Gillette? Loss of focus is what most worries Charlie and me when we contemplate investing in businesses that in general look outstanding. Warren Buffett
• To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks. Benjamin Graham
• In investing, what is comfortable is rarely profitable. Robert Arnott
• The four most dangerous words in investing are: ‘this time it’s different.’ Sir John Templeton
• Experience taught me a few things. One is to listen to your gut, no matter how good something sounds on paper. The second is that you’re generally better off sticking with what you know. And the third is that sometimes your best investments are the ones you don’t make. Donald Trump
• Rule No.1: Never lose money. Rule No.2: Never forget rule No.1. Warren Buffett
• Most investors want to do today what they should have done yesterday. Larry Summers
• You don’t need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with 130 IQ. Warren Buffet
• Fear is the foe of the faddist, but the friend of the fundamentalist. Warren Buffet
• I am a better investor because I am a businessman, and a better businessman because I am no investor. Warren Buffet
• Our approach is very much profiting from lack of change rather than from change. With Wrigley chewing gum, it’s the lack of change that appeals to me. I don’t think it is going to be hurt by the Internet. That’s the kind of business I like. Warren Buffet
• I believe in the discipline of mastering the best that other people have ever figured out. I don’t believe in just sitting down and trying to dream it all up yourself. Nobody’s that smart. Charlie Munger
• All you need for a lifetime of successful investing is a few big winners, and the pluses from those will overwhelm the minuses from the stocks that don’t work out. Peter Lynch
• If you’re looking for a home run — a great investment for five years or 10 years or more — then the only way to beat this enormous fog that covers the future is to identify a long-term trend that will give a particular business some sort of edge. Ralph Wanger
• There are no bad days in the market. When the market is down, you’ve got bargains, and it’s lovely to think of what you are buying at low prices. When the market is up, the bargains have gone, but you’re rich. Bruce Greenwald
• What seems too high and risky to the majority generally goes higher and what seems low and cheap generally goes lower. William O’Neil
• The stock market is a giant distraction to the business of investing. John Bogle
• In the corporate world, if you have analysts, due diligence, and no horse sense, you’ve just described hell. Charlie Munger
• During the Gold Rush, most would-be miners lost money, but people who sold them picks, shovels, tents and blue- jeans (Levi Strauss) made a nice profit. Peter Lynch
• If you are shopping for common stocks, choose them the way you would buy groceries, not the way you would buy perfume. Benjamin Graham
• Obvious prospects for physical growth in a business do not translate into obvious profits for investors. Benjamin Graham
• The obscure we see eventually. The completely obvious, it seems, takes longer. Edward R. Murrow
• Superior investors make more money in good times than they give back in bad times. Howard Marks
• The desire to perform all the time is usually a barrier to performing over time. Robert Olstein
• When you locate a bargain, you must ask, ‘Why me, God? Why am I the only one who could find this bargain?’ Charlie Munger
• We worry top-down, but we invest bottom-up. Seth Klarman
• If it’s growing like a weed, it might be a weed.
• Don’t pass up something that’s attractive today because you think you will find something way more attractive tomorrow. Warren Buffett
• Anyone who believes a growth rate in excess of 15% per annum over the long term is attainable should pursue a career in sales, but avoid one in mathematics. Warren Buffett
• If you don’t know who you are, the market is an expensive place to find out. Adam Smith
• A large advance in the stock market is basically a sign for caution and not a reason for confidence. Ben Graham
• The catch 22 of value investing is if you want to make an above average return, you have to be willing to buy stocks surrounded by short term pessimism and experience some pain. Robert Olstein
• Investors need to pick their poison: Either make more money when times are good and have a really ugly year every so often, or protect on the downside and don’t be at the party so long when things are good. Seth Klarman
• Bull-markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria. Sir John Templeton
• The only investors who shouldn’t diversify are those who are right 100 percent of the time. John Templeton

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Investment maxims

• Buy on fear, sell on greed.
• Buy on the rumor, sell on the news.
• The trend is your friend.
• Never try to catch a falling knife

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• A study of economics usually reveals that the best time to buy anything is last year. Marty Allen
• After all, you only find out who is swimming naked when the tide goes out. Warren Buffet
• Bull Market: A random market movement causing an investor to mistake himself for a financial genius.
• Calling someone who trades actively in the market an investor is like calling someone who repeatedly engages in one-night stands a romantic. Warren Buffet
• I always invest in companies an idiot could run because one day one will. Warren Buffett
• If I’d only followed CNBC’s advice, I’d have a million dollars today. Provided I’d started with a hundred million dollars. Jon Stewart
• Invest in inflation; it’s the only thing going up.   Mark Twain
• Never invest your money in anything that eats or needs painting. William ‘Billy’ Rose
• October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February. Mark Twain
• One gets such wholesale returns of conjecture out of such a trifling investment of fact. Mark Twain
• Silence is golden, and gold is up these days, so silence is a solid investment. Jarod Kintz
• The best investment opportunities are encountered when you are broke. Firestone’s Principle of Investment Timing
• The broker said the stock was “poised to move.” Silly me, I thought he meant up. Randy Thurman
• The market, like the Lord, helps those who help themselves. But unlike the Lord, the market does not forgive those who know not what they do. Warren Buffett
• There is nothing so disastrous as a rational investment policy in an irrational world. John Maynard Keynes
• Why is the man who invests all your money called a broker? George Carlin

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