Losses

“Selling is difficult, and my track record suggests it’s usually a mistake”

“Regardless of yield, when investments are absent of value, cash is always a better option than permanently losing money.”

“Nearly every mistake I’ve made has been because I picked the wrong people, not the wrong idea.”

“Extrapolating existing conditions too far into the future is likely to lead to disappointment. But as long as people continue to make this mistake, and as long as the market consensus reflects it, history will continue to repeat itself in Wall Street.”

“Many investors get “nickeled and dimed” into penury by failing to appreciate that the first loss is not only the best, but usually the smallest. They must learn to avoid defensive rationalization of their past bad judgments.”

“The chief hazard of a careful common stock program is not that it may bring unexpected losses, but that its profits will turn the investor into a speculator greedy for quicker and bigger gains — and therefore headed for ultimate disaster.”

“My experience teaches me that by far the largest losses have been sustained by investors through buying securities of inferior quality under favorable general conditions.”

“Real investment risk is measured not by the percent that a stock may decline in price in relation to the general market in a given period, but by the danger of a loss of quality and earning power through economic changes or deterioration in management.”

“Probably the largest aggregate losses are suffered by people who invest overenthusiastically in a basically sound company.”

“The typical experience of the speculator is one of temporary profit and ultimate loss.”

“Many mistakes have been made in buying growth stocks on the theory that the future will duplicate the past.”

“It is a great mistake to refine the analysis of a single year’s showing to the last possible penny, in order to build from that some substantial idea of the value of the stock; because it cannot be found in the results for any given year no matter how accurately those results were stated.”

“There are two principal mistakes that nearly all amateurs in the stock market make. The first is to have an inexact knowledge of the securities in which one is dealing, to know too little about a company’s management, its earnings, and prospects for future growth. The second mistake is to trade beyond one’s financial resources, to try to run up a fortune on a shoestring.”

“I think that most individual investors make great mistakes when they try and time the market, and try and think about what’s the best stock to buy now.”

“A lot of people look to hit singles and sacrifice bunts and make small returns. But statistically you are far better off with huge gains because you are going to make mistakes. And if you are playing small ball and you make a few mistakes, you can’t recover.”

“Investors lose money not because they’re wrong, but because they’re surprised.”

“The biggest mistakes are made at turning points, not in the middle of trends”

“Most investors mistake a cyclical recovery for a secular trend”

“Large losses are forever – in investing, in teenage driving, and in fidelity. If you avoid large losses with a strong defense, the winnings will have every opportunity to take care of themselves. And large losses are almost always caused by trying to get too much by taking too much risk.”

“The mistake most people make is answering the door just because Mr. Market knocks. You don’t have to let him in.”

“I’m constantly making mistakes where I can, in retrospect, realize that I should have decided differently. And I think that that is inevitable because it’s difficult to be a good investor.”

“People, it turns out, are not that averse to risk. For many reasons, they are not opposed to risk, but they are opposed to losing and the possibility of loss plays a very significant part in their decision.”

“One of the major differences between behavioral economics and standard economics is that, in standard economics, the individual agent is supposed to be driven or motivated by the utility of future wealth and discounted future wealth and present wealth. In behavioral economics, agents are supposed to be motivated by something else: gains and losses.”

“After many years of studying Wall Street’s victors and victims, I must conclude that the American public still insists on losing its savings every time the old hook is baited with the immortal easy-money worm. After every smash the blame is laid on the hook and not on the hunger.”

“Firmly believing that stock speculation is an unbeatable game, I have come to the conclusion that while no bear operator ever made a large fortune in the stock market and kept it, unless he trusteed it, the greatest losses are sustained by the bulls, not because they are bulls, but because there are more of them — more optimists than pessimists.”

“I think I am safe in asserting that the margin trader, speculator, gambler, or whatever you choose to designate the average man who goes to Wall Street after easy money, does not lose money when he sells. He loses it when he buys!”

“One of the biggest mistakes investors make is to look at the last few years and assume that’s the new norm.”

“Most losses come from believing good times will last.”

“Pro-cyclical behavior is one of the greatest and one of the most frequent mistakes.”

“The truth is markets are made up of people, with their emotions, insecurities, their tendency to go to extremes, and their other foibles. Thus, they often make mistakes and swing to erroneous extremes.”

“One of the biggest mistakes you can make is to think that overpriced and going down tomorrow are synonymous. Markets that are overpriced often keep going.”

“Whenever we consider an investment, we think just as much or more about what can go wrong as about what can go right, and we put the avoidance of losses on a high pedestal.”

“The point is to consider risk control, loss avoidance, at least as important as return.”

“A great mob of easily led investors, eagerly searching for “straight tips” which may bring instant wealth, make their mistake in common, and when the mistake is disastrous they try, en masse, to escape.”

“The pain of missing out is greater than the fear of losing”

“Beating the market by losing less than the market isn’t that comforting.”

“Call it humility, call it honesty with yourself, but failing to admit to investment mistakes means failing investing.”

“A lot of people can’t bear to sell when a stock’s price is going up. They’re convinced that they’ve made a mistake if they don’t hold out for the last dollar.”

“Avoiding permanent loss is more important than maximizing returns.”

“The absence of loss is a powerful return.”

“Most mistakes come from action, not inaction”

“The biggest investment risk is not volatility, but permanent loss of capital.”

“If you don’t lose money, most of the time you will make money.”

“If I’ve made one mistake in the course of managing investments it was selling really good companies too soon. Because generally, if you’ve made good investments, they will last for a long time.”

“The first priority is to avoid permanent loss of capital.”

“Debt turns mistakes into disasters”

“You know, we make mistakes. Some go from 12 to 10 and we sell them. Some go from 20 to nothing. In a 10-year period, you are going to have one or two that go from 20 to nothing. If you have more, it is bad.”

“Rational investors will part with their cash only when they believe they are properly compensated for the loss of liquidity and the pain of disquietude.”

“Most mistakes come from failing to see second-order effects.”

“Time magnifies both quality and mistakes.”

“You lose money fast in the stock market. You can’t make it fast.”

“For some reason, you lose money rapidly in the stock market but don’t make it rapidly.”

“You can lose money very fast, in two months, but you very rarely make money very fast in the stock market. When I look back, my great stocks took a long time to work out.”

“One of the oldest sayings on Wall Street is “Let your winners run, and cut your losers.” It’s easy to make a mistake and do the opposite, pulling out the flowers and watering the weeds.”

“There’s a psychological benefit to tossing the bums out: The names disappear from the monthly brokerage statements; we’re no longer reminded of our mistakes.”

“If you cut enough losses, sooner or later there’s nothing left to cut.”

“A correction is nothing more than a Wall Street euphemism for losing a lot of money very rapidly.”

“I have lost a lot of money in some bad savings and loans. I have lost money in bad banks. And I have lost money in electronics companies. It is very easy to lose money in the stock market.”

“You’re going to make mistakes. If you’re terrific in this business you’re right six times out of 10.”

“I’m an optimist, both as a person and an investor. It’s a big mistake to be pessimistic as long as we have a viable civilization which is reasonably well managed.”

“In a public service corporation, bad management may curtail profits or produce losses, good management may turn a weak corporation into a strong one.”

“To lose money is the conventional penalty for bad judgment in speculation.”

“It is true that you don’t go broke taking a profit, but that assumes you will make a profit on everything you do. It doesn’t allow for the mistakes you’re bound to make in the investment business.”

“Faith in the future is as much motivated by confidence as it is a reflection of fear in acknowledging a mistake.”

“Discipline comes from the marketplace, from fear of loss and the consequences that come from overindulgence.”

“Some might see buying and creating value from others’ mistakes as a form of exploitation, but I see it as giving neglected or devalued assets, in any industry, new life.”

“Risk is how much can you lose and what are the chances of losing it.”

“Investors must never mistake an investment that is down in price for one that is bargain-priced; undervaluation is determined only by a security’s price compared to its underlying value.”

“Every great money manager I’ve ever met, all they want to talk about is their mistakes. There’s a great humility there.”

“I’ve made so many mistakes over the years that I struggle to isolate just one as the biggest single mistake. Among the choices though I think excessive leverage has been the most personally painful.”

“If you don’t like to lose money and it affects your judgment, don’t buy things that can go down a great deal.”

“One of the things you learn in this business is humility because you see your mistakes the next day.”

“One of the tricks of this business is, keep your losses down and then, if you have a few good breaks, the compounding works well for you.”

“The riskiness of an investment is not measured by beta (a Wall Street term encompassing volatility and often used in measuring risk) but rather by the probability — the reasoned probability — of that investment causing its owner a loss of purchasing power over his contemplated holding period.”

“I would rather sustain the penalties resulting from over-conservatism than face the consequences of error, perhaps with permanent capital loss, resulting from the adoption of a “New Era” philosophy where trees really do grow to the sky.”

“I am willing to trade the pains (forget about the pleasures) of substantial short term variance in exchange for maximization of long term performance. However, I am not willing to incur risk of substantial permanent capital loss in seeking to better long term performance.”

“I will not abandon a previous approach whose logic I understand even though it may mean foregoing large and apparently easy, profits to embrace an approach which I don’t fully understand, have not practiced successfully and which, possibly, could lead to substantial permanent loss of capital.”

“The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’re got a very good business. And if you have to have a prayer session before raising the price by a tenth of a cent, then you’ve got a terrible business.”

“I really believe it’s better to learn from other people’s mistakes as much as possible.”