1.The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind. –T.T. Munger
2.Try to save something while your salary is small; it’s impossible to save after you begin to earn more. –Jack Benny
3.An investment in knowledge pays the best interest. –Benjamin Franklin
4.It’s how you deal with failure that determines how you achieve success
5.“There are two ways to receive wisdom: mistakes and mentors”
I have a pretty large collection of quotes that I collect…Here are a few of my favourites from the person I respect most - Charlie Munger:
“I did not succeed in life by intelligence. I succeeded because I have a long attention span.”
Time is the individual investor’s last remaining edge on professionals. If you can think about the next five years while most are focused on the next five months, you have an advantage over everyone who tries to outperform based on sheer intellect.
“Other people are trying to act smarter. I’m just trying to be non-idiotic.”
Napoleon’s definition of a military genius was “The man who can do the average thing when all those around him are going crazy.” It’s the same with investing: You don’t have to be brilliant, you just have to consistently be not stupid.
“The way to get rich is to keep $10 million in your checking account in case a good deal comes along.”
You don’t need $10 million, but cash in the bank will be the best friend you’ve ever had when stocks fall. If you’re upset that your cash is earning a dismal interest rate right now, you’re doing it wrong. Cash’s value isn’t its ability to earn interest. Providing flexibility and options is how it earns its keep.
“Nobody survives open heart surgery better than the guy who didn’t need the procedure in the first place.”
Avoid debt. Spend less than you earn. Advocate humility. Learn from your mistakes. If you can manage to not screw up too many times in investing you’ll probably do just fine over time.
If you buy something because it’s undervalued, then you have to think about selling it when it approaches your calculation of its intrinsic value. That’s hard. But if you buy a few great companies, then you can sit on your ass. That’s a good thing.
Someone will always be getting richer faster than you. This is not a tragedy.
These are some of the quotes (which I found insightful) in the book that I’m currently reading - ‘The Art of Value Investing’.
“The foibles of human nature that result in the mass pursuit of instant wealth and effortless gain seem certain to be with us forever.” - Seth Klarman
“The Four Horsemen of the investment apocalypse are fear, greed, hope, and ignorance, only one of which is not an emotion, Fear, greed and hope have wiped out more money than any market downturn ever could” - James O’Shaughnessy
“Markets are inefficient because of human nature - innate, deep-rooted, permanent. People don’t consciously choose to invest with emotion - they simply can’t help it.” - Seth Klarman
“The market is really just a pendulum that forever swings between unsustainable optimism, which makes stocks too expensive, and unjustified pessimism, which makes them too cheap. All we’re trying to do is keep a level head, sell to the optimists, and buy from the pessimists.” - Jonathan Shapiro
“I like to say that changing investment styles to the latest fad produces the same results as changing lanes during rush-hour traffic jams: You increase the risk of an accident with little chance of achieving better results” - Robert Olstein
“Comfort in investing comes at a high cost.” - Staley Cates
“A good business that happens to have a bad balance sheet is much easier to fix than the opposite.” - James Rooney
“It is the anticipation of future earnings that excites people, not the reality.” - Darvas
“The market is better at predicting the news than the news is at predicting the market.” – Gerald Loeb
“Sometimes being a contrarian means staying with the trend.” – Steven Spencer
“The obvious rarely happens, the unexpected constantly occurs.” – Irish proverb
“The stock market is not the kind of game in which one party loses what another wins. It is the kind of game in which, over certain periods of time, nearly everyone may win, or nearly everyone may lose.” – James Grant
“[Ben] Graham’s wonderful sentence is, an investor needs only two
things: Cash and Courage. Having only one of them is not enough. Courage
is a function of process.” - Seth Klarman (H/T Value Investing World)
Time is the friend of the wonderful company, the enemy of the mediocre.
Turnarounds seldom turn.
In a commodity business, it’s very hard to be smarter than your dumbest competitor.
When a management team with a reputation for brilliance joins a business with poor fundamental economics, it is the reputation of the business that remains intact.
Price is what you pay. Value is what you get.
It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.
Risk comes from not knowing what you’re doing
Be fearful when others are greedy, and be greedy when others are fearful.
Look at market fluctuations as your friend rather than your enemy; profit from folly rather than prticipate in it.
Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results.
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.
The stock market is a device for transferring wealth from the impatient to the patient.
Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.
The last one along with a another one (I can’t find the exact quote) about valuing a public company same as a private company triggered a chain of thought deepening my understanding of valuation and the valuation process. It also convinced me to go through his letters and writings. Thus far I had followed his thought 2nd handi.e through article written about him or his thought/teachings.
Some others not related to investing
The chains of habit are too light to be felt until they are too heavy to be broken. - Buffett
You will not be punished for your anger, you will be punished by your anger. - Buddha
When someone with experience proposes a deal to someone with money, too often the fellow with money ends up with the experience, and the fellow with experience ends up with the money - Buffett
"To make money in stocks you must have the vision to see them, the courage to buy them and the patience to hold them. Patience is the rarest of the three."
“Great investors don’t get sucked into the vortex of
influence. This requires the trait of not caring what others think of
you, which is not natural for humans. Indeed, many successful investors
have a skill that is very valuable in investing but not so valuable in
life: a blatant disregard for the views of others.” - Michael Mauboussin
Spinoffs are an interesting place to look because there’s a natural constituency of sellers and there’s not a natural constituency of buyers. - Klarman
In a field where luck plays an important role, one needs to improve the process to get a good outcome. - Michael Mauboussin
Not related to investing
It is not the strongest or the most intelligent who will survive but those who can best manage change. - Leon C. Megginson
“Success is determined by our behavior during bear markets, not during bull markets. During bull markets we simply reap the fruits of seeds sown in bear markets.” - James Osborne (Bason Asset Management)
“The human mind works a lot like the human egg. When one sperm gets into a human egg, there’s an automatic shut-off device that bars any other sperm from getting in. The human mind tends strongly toward the same sort of result. And so, people tend to accumulate large mental holdings of fixed conclusions and attitudes that are not often reexamined or changed, even though there is plenty of good evidence that they are wrong.” - Charlie Munger, The Psychology of Human Misjudgment
It’s so simple yet powerful. Applicable for investing philosophy as well as while looking for companies that make best use of capital. I.e companies that allocate free capital to generate more revenues and hence grow exponentially.
If you are playing poker for hlaf an hour and you don’t know who the Patsy is… its you…
Similarly if in the stock market if the person selling the stock knows more than you… Ie.g management, family, long term investor you are the loser. This also emphasizes detailed research beofre buying the stock.
