In Stock Market, not everybody becomes so successful; only handful of the investors shot the moon. Warren Buffett, Peter Lynch, Charlie Munger, Benjamin Graham, Rakesh Jhunjhunwala, etc. are among them. These are the investors, who ace the market with their experience and expertise. Investing in Stock Market is a kind of education that is needed and it is not same as the conventional education. Stock Market can be learnt only by guidance, experience, and hands-on investing.
The concepts of stock market is quite simple and have not changed over time. It is kind of behavioural study of mass-investors not the arithmetic full of complex formulas. A person having a very basic maths skills can make huge money in the stock market. WoodWallet has collected some of the quotes those will surely give you a path to success. Let us Begin
Inspiring quotes from all-time famous investors
Benjamin Graham
Benjamin Graham was the professor who taught Warren Buffett. He contributed a lot in the investing world especially in value investing in stock market. Some of his wise words are as follows-
- “Buy not on optimism, but on arithmetic.”
- The individual should act consistently as an investor and not as a speculator.
- “The intelligent investor is a realist who sells to optimists and buys from pessimists.”
- “In the short run, the market is a voting machine but in the long run, it is a weighing machine.”
- “Those who do not remember the past are condemned to repeat it.”
- “An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.”
- “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
- “The stock investor is neither right or wrong because others agreed or disagreed with him; he is right because his facts and analysis are right.”
- “Invest only if you would be comfortable owning a stock even if you had no way of knowing its daily share price."
- “A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.”
Warren Buffett
- “Rule #1: Don’t lose money. Rule #2: Don’t forget Rule #1.”
- “Price is what you pay, value is what you get.”
- “Risk comes from not knowing what you’re doing.”
- “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.”
- “It’s far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.”
- “The stock market is a device for transferring money from the impatient to the patient.”
- “Be fearful when others are greedy. Be greedy when others are fearful.”
- “Wide diversification is only required when investors do not understand what they are doing.”
- “When you combine ignorance and leverage, you get some pretty interesting results.”
- “Games are won by players who focus on the playing field –- not by those whose eyes are glued to the scoreboard.”
- “You know , you keep doing the same things and you keep getting the same result over and over again.”
Mohnish Pabrai
- “Minimizing downside risk while maximizing the upside is a powerful concept.”
- “Rapidly changing industries are the enemy of the investor.”
- The only way one should buy stocks is if you understand the underlying business. You stay within the circle of competence. You buy businesses you understand.
- "Basically if you study entrepreneurs, there is a misnomer: People think that entrepreneurs take risk, and they get rewarded because they take risk. In reality entrepreneurs do everything they can to minimize risk. They are not interested in taking risks. They want free lunches and they go after free lunches."
- "It is the performance of the business that matters. It is hard enough to figure out the future of the business. Do not try to figure out the future of the country or the world; focus on the business."
- "One of the first things I tell people is, if you want to learn about investing, you want to open an account and make real investments because that’s when it becomes real."
- “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."
- “Heads, I win; tails, I don’t lose much.”
- “He bought an existing business with a well-defined business model and one with a long history of operations that he could analyse. This is way less risky than doing a start-up.”
Charlie Munger
- "An idiot, or a computer, can diversify a portfolio. But the whole trick of the game is to have a few times when you know something is better than average, and invest only where you have that extra knowledge. If that gets you a few opportunities, that’s enough."
- "Invest in a business any fool can run, because someday a fool will. If it won’t stand a little mismanagement, it’s not much of a business."
- “No wise pilot, no matter how great his talent and experience, fails to use his checklist.”
- “All intelligent investing is value investing. Acquiring more that you are paying for. You must value the business in order to value the stock.”
- “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.”
- “Spend each day trying to be a little wiser than you were when you woke up.”
- "Our game is to recognize a big idea when it comes along when one doesn’t come along very often. Opportunity comes to the prepared mind."
- "A lot of people with high IQs are terrible investors because they’ve got terrible temperaments. And that is why we say that having a certain kind of temperament is more important than brains. You need to keep raw irrational emotion under control. You need patience and discipline and an ability to take losses and adversity without going crazy. You need an ability to not be driven crazy by extreme success."
- “The difference between a good business and a bad business is those good businesses throw up one easy decision after another. The bad businesses throw up painful decisions time after time.”
Peter Lynch
- “Behind every stock is a company. Find out what it’s doing.”
- “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.”
- “Although it’s easy to forget sometimes, a share is not a lottery ticket... it’s part ownership of a business.”
- "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."
- "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."
- "People who want to know how stocks fared on any given day ask, 'Where did the Dow close?' I'm more interested in how many stocks went up versus how many went down. These so-called advance/decline numbers paint a more realistic picture."
- "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."
- "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."
- "If you can follow only one bit of data, follow the earnings (assuming the company in question has earnings). I subscribe to the crusty notion that sooner or later earnings make or break an investment in equities. What the stock price does today, tomorrow, or next week is only a distraction."
- "In business, competition is never as healthy as total domination.In business, competition is never as healthy as total domination."
- "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."
Sir John Templeton
- “It is impossible to produce superior performance unless you do something different from the majority.” - John Templeton
- “The four most dangerous words in investing are: ‘this time it's different.'” - Sir John Templeton
- "Bull markets are born on pessimism, grown on scepticism, 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."
- "If you want to have a better performance than the crowd, you must do things differently from the crowd."
- "Focus on value because most investors focus on outlooks and trends."
- "The only reason to sell them a stock now is to buy other, more attractive stocks. If you can’t find more attractive stocks, hold on to what you have."
- "Sell a stock only when you have found a new stock that is a 50% better bargain than the one that you hold."
- "If you buy all the stocks selling at or below two times earnings, you will lose money on half of them because instead of making profits they will actually lose money, but you will only lose a dollar or so a share at most. Then others will be mediocre performers. But the remaining big winners will go up and produce fabulous results and also ensure a good overall result."
- “Forgive yourself for your errors. Don’t become discouraged, and certainly don’t try to recoup your losses by taking bigger risks. Instead, turn each mistake into a learning experience. Determine exactly what went wrong and how you can avoid the same mistake in the future.”
- “The challenge is not simply making better investment decisions than the average investor. The real challenge is making investment decisions that are better than those of the professionals who manage the big institutions.”
Seth Klarman
- "The single greatest edge an investor can have is a long-term orientation."
- "To a value investor, investments come in three varieties: undervalued at one price, fairly valued at another price, and overvalued at still some higher price. The goal is to buy the first, avoid the second, and sell the third."
- "The stock market is the story of cycles and of the human behaviour that is responsible for overreactions in both directions."
- "Investing is the intersection of economics and psychology. The analysis is actually the easy part. The economics, the valuation of the business isn’t that hard. The psychology – how much do you buy, do you buy it at this price, do you wait for a lower price, what do you do when it looks like the world might end – those things are harder. Knowing whether you stand there, buy more, or whether something has legitimately gone wrong and you need to sell, those are harder things. That you learn with experience, by having the right psychological makeup."
- "A value strategy is of little use to the impatient investor since it usually takes time to pay off."
- "Value investing is at its core the marriage of a contrarian streak and a calculator."
- "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."
- "We buy expecting to hold a bond to maturity and a stock forever."
- "Ultimately, nothing should be more important to investors than the ability to sleep soundly at night."
- "When people give away stocks based on forced selling or fear that is usually a great opportunity."
- "Patience and discipline can make you look foolishly out of touch until they make you look prudent and even prescient."
- "Over the long run, the crowd is always wrong."
- "Value investors have to be patient and disciplined, but what I really think is you need not to be greedy. If you’re greedy and you leverage, you blow up. Almost every financial blow up is because of leverage."
- "In reality, no one knows what the market will do; trying to predict it is a waste of time, and investing based upon that prediction is a speculative undertaking."
- "The prevailing view has been that the market will earn a high rate of return if the holding period is long enough, but entry point is what really matters."
- "The overwhelming majority of people are comfortable with consensus, but successful investors tend to have a contrarian bent."
- "Value investing is simple to understand but difficult to implement. Value investors are not super sophisticated analytical wizards who create and apply intricate computer models to find attractive opportunities or assess underlying value. The hard part is discipline, patience, and judgment. Investors need discipline to avoid the many unattractive pitches that are thrown, patience to wait for the right pitch, and judgment to know when it is time to swing."
Phillip Fisher
- “The stock market is filled with individuals who know the price of everything, but the value of nothing.”
- "If the job has been correctly done when a common stock is purchased, the time to sell it is -- almost never."
- "The amount of mental effort the financial community puts into this constant attempt to guess the economic future from a random and probably incomplete series of facts makes one wonder what might have been accomplished if only a fraction of such mental effort had been applied to something with better chance of proving useful."
- "Regardless of how high the rating may be in all other matters, however, if there is a serious question of the lack of a strong management sense of trusteeship for stockholders, the investor should never seriously consider participating in such an enterprise."
- "More money has probably been lost by investors holding a stock they really did not want until they could 'at least come out even' than from any other single reason."
- "The company that makes above-average profits while paying above-average wages for the area in which it is located is likely to have good labor relations. The investor who buys into a situation in which a significant part of earnings comes from paying below-standard wages for the area involved may in time have serious trouble on his hands."
- "The conventional method of timing when to buy stocks is, I believe, just as silly as it appears on the surface to be sensible. This method marshal a vast mass of economic data. From these data conclusions are reached as to the near- and medium-term course of general business."
- "[Once] a stock has been properly selected and has borne the test of time, it is only occasionally that there is any reason for selling it at all."
- "When do stockholders get no benefit from retained earnings? One way is when managements pile up cash and liquid assets far beyond any present or prospective needs for the business."
- "It is only in rare cases even among outstanding corporations that the opportunity for growth is so great that the management cannot afford to pay some part of earnings and still... obtain adequate cash to take advantage of worthwhile growth opportunities."
- "I believe that the economics which deal with forecasting business trends may be considered to be about as far along as was the science of chemistry during the days of alchemy in the Middle Ages."
- "Investors have been so oversold on diversification that fear of having too many eggs in one basket has caused them to put far too little into companies that they thoroughly know and far too much into others about which they know nothing at all. It never seems to occur to them, much less their advisors, that buying a company without having sufficient knowledge of it may be even more dangerous than having inadequate diversification."
- "The ability to see through some majority opinions to find what facts are really there is a trait that can bring rich rewards in the field of common stocks. It is not easy to develop, however, for the composite opinion of those with whom we associate is a powerful influence upon the minds of all of us."
- "[The] greatest investment reward comes to those who by good luck or good sense find the occasional company that over the years can grow in sales and profits far more than industry as a whole."
- "[Knowing] the rules and understanding... common mistakes will do nothing to help those who do not have some degree of patience and self-discipline. One of the ablest investment men I have ever known told me many years ago that in the stock market a good nervous system is even more important than a good head."
Joel Greenblatt
- “Choosing individual stocks without any idea of what you're looking for is like running through a dynamite factory with a burning match. You may live, but you're still an idiot.”
- “So one way to create an attractive risk/reward situation is to limit downside risk severely by investing in situations that have a large margin of safety. The upside, while still difficult to quantify, will usually take care of itself. In other words, look down, not up, when making your initial investment decision. If you don’t lose money, most of the remaining alternatives are good ones.”
- “The strategy of putting all your eggs in one basket and watching that basket is less risky than you might think.”
- “Even after you learn where to look for new ideas, the notion that you can cover even one-tenth of these special corporate events is a pipe dream.”
- “if you just stick to buying good companies (ones that have a high return on capital) and to buying those companies only at bargain prices (at prices that give you a high earnings yield), you can end up systematically buying many of the good companies that crazy Mr. Market has decided to literally give away.”
- “Although over the short term, Mr. Market may set stock prices based on emotion, over the long term, it is the value of the company that becomes most important to Mr. Market.”
- “After more than 25 years of investing professionally and after 9 years of teaching at an Ivy League business school, I am convinced of at least two things: 1. If you really want to “beat the market,” most professionals and academics can’t help you, and 2. That leaves only one real alternative: You must do it yourself.”
- “When thinking about risk, rather than making things unnecessarily complicated, there are really two main things you should want to know about an investment strategy: 1. What is the risk of losing money following that strategy over the long term? 2. What is the risk that your chosen strategy will perform worse than alternative strategies over the long term?”
- “Of course, there are plenty of ways we could define what makes a business either good or bad. Among other things, we could look at the quality of its products or services, the loyalty of its customers, the value of its brands, the efficiency of its operations, the talent of its management, the strength of its competitors, or the long-term prospects of its business.”
