Turnover

“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.”

“In a world that thrives on 24 hours a day financial news, inactivity is seen as brain dead.”

“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.””

“Individual investors tend to churn their accounts, they tend to trade too much, and that they trade too much seems to be due to over-confidence. They believe they know something that they do not know and this is one essential characteristic of human beings, which makes them different from rational beings.”

“People do not care for the idea that any important activity which affects them is as beyond their control as a pair of dancing dice.”

“It’s now a rent-a-stock industry, compared with the old own-a-stock industry when turnover was 16 percent and the average holding period was six years.”

“Activity is the enemy of returns”

“The more you trade, the harder it is to add value because you’re absorbing a lot of transaction costs, not to mention taxes.”

“Inactivity is a competitive advantage.”

“Any form of hyper-activity with large amounts of money in securities markets can create problems for all participants.”

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

“You will be right, over the course of many transactions, if your hypotheses are correct, your facts are correct, and your reasoning is correct.”