Speculation

“The tools that get investors and speculators in and out of the market only after some widely followed average has turned must obviously exaggerate the movements of the market.”

“Tradition, sentiment, vague generalizations, unsubstantiated rumors, can never be made the basis of sound investment or intelligent speculation. Now and then large profits are realized on no better foundation — merely proving that sometimes luck laughs at logic.”

“In a speculative market, what counts is imagination and not analysts.”

“Speculation, I imagine, is a theme almost as popular as love; but in both cases most of the comments made are rather trite and not particularly helpful.”

“Speculative operations are all concerned with changes in price. In some cases the emphasis is on price changes alone, and in other cases the emphasis is on changes in value which are expected to give rise to changes in price.”

“Let us define the speculator as one who seeks to profit from market movements, without primary regard to intrinsic values; the “prudent stock investor” as one who (a) buys only at prices amply supported by underlying value, and (b) who determinedly reduces his stock holdings when the market enters the speculative phase of a sustained advance.”

“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.”

“It is a safe prediction for me to make that, in future years as in the past, common stocks will advance too far and decline too far, and that investors, like speculators — and institutions, like individuals — will have their periods of enchantment and disenchantment with equities.”

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

“Speculators often prosper through ignorance.”

“The investor must recognize that there are uncertain, and hence, speculative elements inherent in any policy he follows.”

“The higher the quality of a company the more inescapable is the speculative component in its price, and the more subject it is to wide price variations.”

“Let us define the speculator as one who seeks to profit from market movements, without primary regard to intrinsic value; the prudent stock investor as one who (a) buys only at prices amply supported by underlying value, and (b) who determinedly reduces his stock holdings when the market enters the speculative phase of a sustained advance.”

“It is interesting to see how unpopular companies can become, merely because their immediate prospects are clouded in the speculative mind.”

“Mathematics is ordinarily considered as producing precise and dependable results; but in the stock market the more elaborate and abstruse the mathematics the more uncertain and speculative are the conclusions we draw therefrom.”

“If a common stock is a good investment it is also a good speculation.”

“Allied to the general pattern of market movements is the general pattern of speculative thinking.”

“Good common stocks are investment media which are subject to speculative influences. The speculative influences are not in the common stocks; they are in the minds of the people who buy and sell them.”

“The problem of investment in common stocks is either to insulate yourselves from the speculative influences, or else to adjust your investment policy so that you can take advantage of the speculative fluctuations that are imposed upon the basic investment quality of common stocks.”

“Never before had there been such gambling as there was in those last turbulent years of the ’20s, but few people realized they were gambling — they thought they had a sure thing.”

“Not even the “safest” investment is without some risk and some element of speculation.”

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

“I think you should try and make your money in this world by selling other people things that are good for them. If you’re selling them gambling services where you rake profits off of the top, like many of these new brokers who specialize in luring the gamblers in, I think it’s a dirty way to make money and I think that we’re crazy to allow it.”

“We have a stock market which some people use like a gambling parlor.”

“I didn’t get rich by buying stocks at a high price-earnings multiple in the midst of crazy speculative booms, and I’m not going to change.”

“Averaged out, betting on the quality of a business is better than betting on the quality of management. In other words, if you have to choose one, bet on the business momentum, not the brilliance of the manager.”

“When I shifted my focus from beating gambling games to analyzing the stock market, I naively thought that I was leaving a world where cheating at cards was then problematic and entering an arena where regulation and the rule of law gave investors a fair playing field. Instead, I learned that bigger stakes attracted bigger thieves.”

“Gambling is a tax on ignorance. People often gamble because they think they can win, they’re lucky, they have hunches, that sort of thing, whereas in fact, they’re going to be remorselessly ground down over time.”

“Casino gambling with a system where you have the edge is a wonderful teacher for elementary money management.”

“The demand for reform is naturally greatest after a market crash, which is usually precipitated by multitudes of little gamblers who are themselves their own victims.”

“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.”

“It is one of the maxims of speculation that stocks never go up, but must be put up.”

“One of the speculators’ hells consists of thinking of the money you didn’t make. If you had only done what you ought to have done, but didn’t!”

“Knowledge, indeed, is the enemy of a speculator during a boom.”

“For years I have contended that the average speculator does not lose his money in Wall Street. He loses it wherever he happens to be the instant he decides to let the ticker put unearned dollars in his pocket. The game does not beat the player; he beats himself.”

“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!”

“Intelligent speculators and investors who do not play the market feverishly do not need to spend the day beside a ticker or before a quotation board.”

“Anything that helps make addicts out of occasional traders should be avoided as if it were the bubonic plague.”

“The stock speculator, as a rule, is beaten by himself!”

“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 believe denying clients the ability to be hyper-traders is doing them a favor. Most people are not adept enough to take advantage of short-term mis-valuations, and I put myself in that category.”

“A gambler seeks and makes risks which it is not necessary to assume, whereas the speculator is one who merely volunteers to assume those risks of business which must inevitably fall somewhere.”

“The chief evils of speculation flow from the participation of the general public, who lack the special knowledge, and enter the market in a purely gambling spirit.”

“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.”

“Speculation is a loser’s game. Because of the costs, it has to be a loser’s game.”

“What we do know is that speculative episodes never come gently to an end. The wise, though for most the improbable, course is to assume the worst.”

“The occupational disease of the speculator is acute uneasiness.”

“Booms start with some tie-in to reality, some reason which justifies the increase in asset values, and then — and this is the critical feature of speculative mood — the market loses touch with reality.”

“When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done.”

“Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation.”

“The game of professional investment is intolerably boring and overexacting to anyone who is entirely exempt from the gambling instinct; whilst he who has it must pay to this propensity the appropriate toll.”

“The best investors think like business owners, not stock traders”

“To me, the primary task in investing is to test and then retest some more the parameters and paradigms that appear to govern daily events. Betting against them is dangerous when they look solid, but accepting them without question is the most dangerous step of all.”

“Survival as an investor over that famous long course depends from the very first on recognition that we do not know what is going to happen. We can speculate or calculate or estimate, but we can never be certain.”

“Think like an owner, not a speculator.”

“Stocks aren’t lottery tickets. Behind every stock is a company.”

“Stocks are not lottery tickets. There’s a company behind every stock. If the company does well, the stock does well. It’s not that complicated.”

“Market timing is speculating and it rarely, if ever, pays off.”

“The road to success in speculation is the study of values.”

“Even in the highest grade securities, there is a certain inescapable speculative risk.”

“The average trader is naturally a chronic bull. It is human nature to prefer optimism to pessimism.”

“Most useful and most dangerous are the stock market averages, most useful in revealing the general trend of the market, most dangerous if they mislead the trader into forgetting that, after all, his profits depend on the movements of the individual stocks in which he deals.”

“In analyzing stocks, industrials or otherwise, the speculator must constantly bear in mind that no two companies are strictly comparable. He must always be prepared to make due allowance for points of unlikeness.”

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

“Bull markets and bear markets last long enough so that the average trader is likely to forget by the time the climax is approaching that any sort of movement is possible.”

“The line I draw in the sand is that if an asset has cash flow or the likelihood of cash flow in the near term and is not purely dependent on what a future buyer might pay, then it’s an investment. If an asset’s value is totally dependent on the amount a future buyer might pay, then its purchase is speculation.”

“I’ve thought a lot of things when I’m managing money with great, great conviction, and a lot of times I’m wrong. And when you’re betting the ranch and the circumstances change, you have to change, and that’s how I’ve always managed money.”

“The propensity to gamble is always increased by a large prize versus a small entry fee, no matter how poor the true odds may be.”

“There is nothing at all conservative, in my opinion, about speculating as to just how high a multiplier a greedy and capricious public will put on earnings.”

“To some degree, I’m betting on the continuation of what is now. I’m not betting it will continue exactly, but I’m betting against dramatic discontinuities.”