Stock Market

“The result is a concentrated portfolio that tends to be more volatile than the indices — a situation that’s not well tolerated by lay people and Wall Street alike.”

“Value investing is a way of life. I apply it to everything I do. It’s not just stock markets.”

“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.”

“While the Stock Exchange list exhibits the widest diversity, in both directions, between market prices and book values, the underlying explanation is simple enough. In general, prosperous enterprises sell for more than their assets, and unsuccessful ones sell for less.”

“In the stock market, facts are important, but emphasis is all important.”

“I am skeptical about stock market forecasting by anybody, and particularly by bankers.”

“If we assume that a very considerable amount of Wall Street activity must inevitably have elements of chance in it, then the sound idea would be to measure these chances as accurately as you can, and play the game in the direction of having the odds on your side.”

“Wall Street has a beautiful collection of very ancient and often very incorrect traditions.”

“If we really knew what the future will bring that is all we would have to know; but since stock market people can only guess the future and since they have the embarrassing habit of guessing wrongly, it seems best not to lay too much stress upon forecasts.”

“Participation in the stock market is not limited to the experienced, the conservative, nor even the intelligent. It is a game at which any number of people may play. And as the market level rises, the quantity of players grows rapidly and their quality diminishes somewhat in proportion.”

“The only significance of stock market gyrations to the true investor is that they give him an opportunity to buy good common stocks when they are cheap — or at least reasonably priced — and at times offer him an invitation to sell out at temptingly high levels.”

“The idea of measuring investment risks by price fluctuations is repugnant to me, for the very reason that it confuses what the stock market says with what actually happens to the owners’ stake in the business.”

“I don’t see how you can say that the prices made in Wall Street are the right prices in any intelligent definition of what right prices would be.”

“They used to say about the Bourbons that they forgot nothing and they learned nothing, and I’ll say about the Wall Street people, typically, is that they learn nothing, and they forget everything.”

“There are two requirements for success in Wall Street. One, you have to think correctly; and secondly, you have to think independently.”

“I insist that more damage has been done to stock values and to the future of equities from inside Wall Street than from outside Wall Street.”

“All my experience goes to show that most investment advisers take their opinions and measures of stock values from stock prices. In the stock market, value standards do not determine prices; prices determine value standards.”

“People without experience or superior ability may make a lot of money fast in the stock market, but they cannot keep what they make, and most of them will end up as net losers.”

“A large advance in the stock market is basically a sign for caution and not a reason for confidence.”

“Investors feelings and reactions regarding inflation are probably more the result of the stock market action that they have recently experienced than the cause of it.”

“In 44 years of Wall Street experience and study, I have never seen dependable calculations made about common stock values, or related investment policies, that went beyond simple arithmetic or the most elementary algebra.”

“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.”

“Be skeptical of the popular reasoning behind any spectacular move in the stock market — but don’t be too sure this reasoning is wrong.”

“In the stock market one quickly learns how important it is to act swiftly.”

“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.”

“One could say that my whole career in Wall Street proved one long process of education in human nature.”

“The strange fascination that the stock market exerts upon people has never ceased being a source of wonder to me.”

“The stock market registers the judgments of multitudes of buyers and sellers about the many factors which affect business — what business is like today; what it will be like in the future.”

“The impression has built up that the stock market is the cause of booms and busts. Actually, it is the thermometer — not the fever.”

“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.”

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

“If you go to the stock market because you want excitement, then sooner or later you will lose.”

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

“Wall Street has this wonderful business about how to create transactions. They set up what we believe are false expectations, and that’s what I call the “beat by a penny, missed by a penny syndrome.””

“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.”

“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.”

“On October 24, 1929, millions of Americans recalled poignantly the hundreds of blithe prophecies that our feelings never again would be harrowed by absurd exhibitions of mob hysteria or mass emotionalism in the stock market. We were living in a new era.”

“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!”

“You can’t imagine how many shrewd, experienced business men forget in Wall Street what it took them years to learn.”

“Nobody knows what the stock market is going to do or even what it ought to do. Hence, the most valuable asset in all business, which is knowledge, is necessarily absent.”

“Wall Street in boom days is an aggregation of madmen. The Stock Exchange becomes Bedlam well dressed.”

“In the beginning of a stock market boom it is ever the “dear public,” the fleecy lambs, the most guileless victims, who make the most money. They really do not know when to stop winning, and so in the end they lose profit and principal.”

“Fortunes are made and lost by thousands of men in the stock market; they are made and kept by a few dozen.”

“Many things are possible in Wall Street. But neither there nor anywhere else has a man ever prospered by trying to hog it.”

“In Wall Street, what has happened before will happen again. It must, as you will admit if you stop to think about it.”

“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 know that stocks represent fractional ownership in businesses and that, over time, the stock market will reflect their true intrinsic values. And crises bring worries and fears that make many investors forget that simple fact.”

“We start with the assumption that the stock market is always wrong, so that if you copy everybody else on Wall Street you’re doomed to do poorly.”

“Analysts generally regard the stock market as the passive reflection of investors’ expectations. But in fact, it is an active force in shaping them.”

“On Wall Street, you have all sorts of people who tell you on October 8, 2013, the Dow Jones will be at 18,225. You’re lucky if they don’t give you the decimals. Of course this is nonsense, nobody knows.”

“People who have had success in other parts of their lives have difficulty accepting how much failure there is in the stock market.”

“We deceive ourselves when we believe that past stock market return patterns provide the bounds by which we can predict the future.”

“Of all the mysteries of the stock exchange there is none so impenetrable as why there should be a buyer for everyone who seeks to sell. October 24, 1929 showed that what is mysterious is not inevitable. Often there were no buyers, and only wide vertical declines could anyone be induced to bid.”

“Wall Street has always been much esteemed as something to blame.”

“The stock market does have a life of its own.”

“In all my 55 years on Wall Street, before I retired to do something vastly more important, I was never able to say when the market would go up or down. Nor was I able to find anybody on Earth whose opinion I would value on the subject of when it would go up and down.”

“In all my 60 years in the stock market, I never found anyone whose opinion of what the stock market would do next week or next month was worth heeding.”

“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.”

“Wall Street tends to overreact when it gets worried about earnings.”

“Liquidity does not exist unless someone else is willing to give you cash in exchange for the piece of paper you want to sell.”

“The enchantment which some growth companies convey to the stock market lends a premium to their common stocks which is not always justified by the statistical background.”

“The history of the stock market shows many periods of twenty years or more when stock prices ended up precisely where they began.”

“There is evidence that the stock market is more efficient in processing information about what other investors are doing than it is in processing fundamental information about the underlying assets, which is why stock prices so often turn out with hindsight to have been crazy rather than rational.”

“The thesis underlying everything, whether you’re an actively managed fund or a passive fund, is that the U.S. will be OK. If you don’t believe that, you shouldn’t be in the stock market.”

“The stock market’s been the best place to be over the last 10 years, 30 years, 100 years. But if you need the money in 1 or 2 years, you shouldn’t be buying stocks.”

“In the stock market, the most important organ is the stomach. It’s not the brain.”

“Almost everybody on this planet has the brain power to make money in the stock market. The question is whether you have the stomach for it and whether you’re willing to do a little bit of work? Those are the key elements.”

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

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

“A lot of my stocks don’t work. The beauty of the stock market is that if you are wrong, if you put $1,000 up, all you lose is $1,000. I have proven that many times.”

“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.”

“People who exit the stock market to avoid a decline are odds-on favorites to miss the next rally.”

“It’s in the nature of Wall Street to imagine that whenever a company sets a record for earnings, it will go on setting new ones.”

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

“What I do know about the stock market is that it looks forward.”

“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. If you go to Minnesota in January, you should know it’s gonna be cold. You don’t panic when the thermometer falls below zero.”

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

“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.”

“So the stock market will definitely have a correction. Everybody will say that it is the end of the world. I predict it. They will say the big one’s coming.”

“People who have made money in the stock market usually bought companies that have done well over time.”

“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.”

“The single most important thing to me in the stock market for anyone is to know what you own.”

“Suppose you bought a stock cheap when it was a relatively obscure situation, and then a half-dozen Wall Street firms started cheering for the stock at the same time. I’d get concerned and think about selling. I don’t like bandwagons. I’d rather do my own thing.”

“If some of the most astute people in Wall Street have frequently guessed wrong in trying to profit by stock market movements, it may not be too much to assume that the attempt itself has represented a misconception of the proper function of management.”

“One point movements may be likened to the ripples of the stock market, whose occurrence may be influenced by so great a multitude of factors that it is impossible to forecast them. Ten-point movements may perhaps be compared to waves.”

“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.”

“Fashions play their part in the stock market as in other affairs of life.”

“The official who keeps one eye on his business and one on the stock market is not likely long to be numbered among the leaders.”

“Cash really hurts if you hold it very long in an equity market that is compounding at close to 20% per annum.”

“One thing all of us know for sure is that the stock market doesn’t go down just because a lot of folks think that it has entered the heart of looney land.”

“The stock market itself seems to be mainly driven by fashions and fads. However, when you look at individual stocks, it’s a different story, because individual stocks are much more diverse, and some of them can be predicted to perform well over the long run.”

“After a stock market decline, people may perceive more risk than before when, in fact, the decline may have taken some of the risk out of the market.”

“If you think of the stock market as a cauldron of minestrone soup that occasionally somebody sticks a ladle in and stirs up, it takes a while before all the vegetables float back to the level that they were at before.”

“If the stock market has a period of outperformance of its long-term return, it is inevitably followed by some period of underperformance. But people being optimistic and greedy by nature take the recent short-term outperformance of stocks as a sign of good things to come, rather than a warning of bad things to come.”

“One of the illusions that people on Wall Street have is that they can have perfect information on a stock.”

“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.”

“Stock market efficiency is an elegant hypothesis that bears quite limited resemblance to the real world.”

“In my view, predicting future private market value is like predicting future Dow Jones levels: It doesn’t make any sense at all.”

“Sadly, on Wall Street, rewards for acting with self-interest and to disadvantage public shareholders often prove to be too tempting.”

“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.”

“Most people on Wall Street don’t have principles to begin with. And if they have them, they don’t stick to them.”

“We don’t buy and sell stocks based upon what other people think the stock market is going to do (I never have an opinion) but rather upon what we think the company is going to do.”

“The course of the stock market will determine, to a great degree, when we will be right, but the accuracy of our analysis of the company will largely determine whether we will be right. In other words, we tend to concentrate on what should happen, not when it should happen.”

“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.”

“While Wall Street may not like rules, it adjusts its thinking immediately to the question of what pays off under any new rules that are promulgated.”

“When the price of a stock can be influenced by a “herd” on Wall Street with prices set at the margin by the most emotional person, or the greediest person, or the most depressed person, it is hard to argue that the market always prices rationally. In fact, market prices are frequently nonsensical.”

“In the stock market, you don’t base your decisions on what the markets are doing, but on what you think is rational.”

“Whatever can be sold, Wall Street will provide.”

“The disadvantage of being in any kind of a market type environment – Wall Street would be the extreme – is that you get over-stimulated. You think you have to do something every day.”

“Wall Street makes its money on activity. You make your money on inactivity.”

“I am certainly not going to predict what general business or the stock market are going to do in the next year or two since I don’t have the faintest idea.”