Economics

“Like the basic laws of physics, where action creates reaction, economic and political trends tend to develop their own countervailing pressures.”

“Investor anticipations, similar to the laws of economics, are shaped at the margin. That is why changes in earnings estimates follow, for the most part, changes in stock prices, and not vice versa as it should be.”

“As all of us were taught, but most of us have long since forgotten, economic change occurs at the margin, where the action takes place.”

“Economist picture a thousand buyers and sellers congregating in the market place to match their keen wits and finally evolve the correct price for each commodity. In the securities market particularly, the word of the ticker is accepted as law, so that one often thinks of prices as determining values, instead of vice-versa.”

“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.”

“When it comes to statements about the future in the economic realm, none of us have knowledge in the scientific sense of the term. What we have is opinions and surmises — let us hope, based upon adequate reflections and study.”

“Economic events rarely unfold in the way stock-market people forecast them.”

“The market cycle will once more prove to be the human-nature cycle; its economic background will have changed, but not its basic character nor the consequences of its character.”

“I think economists as rule…take for granted they know a lot of things. If they really knew so much, they would have all the money and we would have none.”

“Whether stocks rise or fall is determined by innumerable forces and elements, by economic conditions, the actions of governments, the state of international affairs, the emotions of people — even the vagaries of the weather.”

“No one, not even the most experienced trader, economist or businessman can predict with certainty the course of the stock market.”

“Using the outlook for the economy to predict the direction of the stock market, which most appear to do, has it exactly backward. The stock market’s behavior will predict the economy’s future behavior.”

“The reason commodity prices are so volatile is that they are commodities, economically undistinguishable items except for price.”

“Complex adaptive systems such as markets and economies are characterized by imbalances. They are non-linear, non-equilibrium systems; the imbalances are a reflection of the systems’ adaptation to change.”

“As long-term investors, we position portfolios for the 95% of the time the economy is growing, not the unforecastable 5% when it is not.”

“Economic numbers report the past, and corporations observe the present, while the market lives in the future.”

“Bull markets typically begin when the following four conditions are present: the economy is bottoming, profits are bottoming, the Fed is stimulating, and valuations are low.”

“People often say there’s lots of uncertainty, but when was there ever certainty in the markets, the economy, or the future? I’m just trying to understand the present.”

“Wall Street is pure economics and when profit opportunities look good, debt leverage makes them look better.”

“Over the long-term, big companies of America behave more like biology than they do anything else. In biology, all the individuals die and so do all the species. It’s just a question of time. And that’s pretty well what happens in the economy too.”

“If you totally divorce economics from psychology, you’ve gone a long way toward divorcing it from reality.”

“The great lesson in microeconomics is to discriminate between when technology is going to help you and when it’s going to kill you.”

“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.”

“All booms are alike. The stage setting varies, but fundamentally they are as drops of water. Customs, like costumes, change from force of environment and economic conditions, but human nature remains the same.”

“It is one of the common pieces of Wall Street experience that when the public goes stock mad and the market leaders are filled with the arrogance of prolonged success, such little things as high money rates or decreases in earnings or unraised dividends have no instant effect on the market — that is, on the state of mind of the speculating public. In the end, of course, all violations of the fundamental laws of economic and financial common sense are paid for; but every bull thinks he will unload before the break.”

“I learned from great investors like Warren Buffett and Peter Lynch that you have to look at stocks not based on world events or economic data but almost in spite of them.”

“Extrapolation is usually right, but not valuable, and predictions of deviation from trends are potentially profitable but rarely right. So far, macro-economic forecasting doesn’t represent the path to superior investments.”

“I’ve heard it said that an economist is a portfolio manager who never marks to market.”

“I’ve listened to a lot of economic briefings, and I’ve had a lot of visits from economists, and I’ve never encountered one who was right consistently.”

“GDP growth doesn’t equal shareholder returns.”

“Disruption stories often ignore economics.”

“Over the very long run, it is the economics of investing — enterprise — that has determined total return; the evanescent emotions of investing — speculation — so important over the short run, have ultimately proven to be virtually meaningless.”

“Economists, when they seek to be profound, often succeed only in being wrong.”

“The fact is that our theories of rationality in economic behavior rest upon introspection. We are as apt to deceive ourselves about the prudence and rationality of our plans as about their moral worth.”

“Attempting to guess short-term swings in individual stocks, the stock market or the economy is not likely to produce consistently good results. Short-term developments are too unpredictable.”

“Debt turns mistakes into disasters”

“With stocks, you have to worry about the market. With debt, I just have to understand the contract. If my analysis is right, I’ll make money.”

“When you look carefully at the economics of shorting, it makes no sense to take the bet. The lowest price a company’s stock can go to is zero, but there’s an unlimited upside. An unleveraged short position has a maximum payoff of 2:1.”

“Scale economies shared create extraordinary outcomes.”

“Culture is an economic asset.”

“Economic development or growth occurs in three different processes: in the increase of population, in the accumulation of capital, and in the technological progress which enables us to produce more things, better things, different things, or the same things more cheaply.”

“So long as a capitalist system persists and the financial markets hold together, equities do have a built-in long-term rate of return. That rate of return is a nominal measure of the economy.”

“You never can predict the economy. You can’t predict the stock market.”

“The strength of our economy is that it is dynamic and always adapting to changing conditions. That’s our advantage in the world.”

“There is no Ground Hog Day, when all the economists come out from the tunnel and declare the recession is over. They have a retroactive, seasonally-adjusted Ground Hog Day.”

“I’ve always said if you spend 13 minutes a year on economics, you’ve wasted 10 minutes.”

“The best time to get involved with cyclicals is when the economy is at its weakest, earnings are at their lowest, and public sentiment is at its bleakest.”

“There are economic facts and there’s economic predictions and economic predictions are a total waste.”

“I didn’t spend any time predicting the economy, or the stock market. I spent all my time looking at companies.”

“Every economic recovery since World War II has been preceded by a stock market rally. And these rallies often start when conditions are grim.”

“The stock market has a 100% record, in the last 50 years, of predicting upturns in the economy. It’s never been wrong. It’s less than 50-50 on a downturn.”

“If a company has a sound balance sheet with minimal long-term debt, good growth prospects and responsible management, then the stock should be interesting.”

“Economic history never repeats itself exactly.”

“My stocks sometimes get overpriced, but in the long run this kind of company, if you can find it, will outperform the market and the economy. The worst thing you can do is try to catch the swings, sell out too soon and be afraid to buy back in.”

“Credit is the most important part of the economy.”

“When debt grows faster than income, problems emerge”

“Those who understand debt cycles can protect themselves.”

“A good record doesn’t necessarily prove good management. Outside economic factors such as the business cycle can make any company look good for a while.”

“Investors in distressed property are motivated primarily by the expectation that the equity value of a real estate asset acquired at less than its original cost-to-construct will in time increase to a point that justifies its original indebtedness.”

“Developers are creating a product that meets the developer’s test of profitability, not necessarily the marketplace’s test of economic viability. If the developer believes the creation and presale of the product assure him a profit, then the discipline of the marketplace disappears and oversupply follows.”

“Real estate investment decisions do not lend themselves to macroeconomic issues. Real estate is a local market, by definition. lt is not possible to focus on national trends; one must focus on local issues and characteristics.”

“Do I think 100-story buildings were ever economical? No. They were just phallic symbols in an environment where we lived in la-la land and thought we were never vulnerable.”

“Investing is buying a fractional interest in a business and buying debt claims on a business.”

“It is crucial to have a strategy in place before problems hit, precisely because no one can accurately predict the future direction of the stock market or economy.”

“You must always be prepared for the unexpected, including sudden, sharp downward swings in markets and the economy. Whatever adverse scenario you can contemplate, reality can be far worse.”

“In general, the batting average of doomsayers in the U.S. is terrible. Our country has consistently made fools of those who were skeptical about either our economic potential or our resiliency.”

“When a manager with a reputation for brilliance tackles a business with a reputation for bad economics, the reputation of the business remains intact.”