Uncertainty

“Too many investors fail to follow some simple, time-tested tenets that improve the odds of achieving success and, at the same time, reduce the anxiety naturally associated with an uncertain undertaking.”

“The trouble with stockholders, in my humble opinion, is that not enough of them are disgruntled.”

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

“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.”

“It is almost a tautology in capital markets that the best investments are those with the worst previous returns, where expectations are low, demand is down, and prospects appear at best highly uncertain.”

“What I believe will happen in financial markets and what ends up happening have no necessary relationship. The future is uncertain, and the returns investors earn will depend on the nexus of actions taken and how events unfold.”

“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.”

“Valuation is determined by the relation between a stock price and the present value of the free cash the business will generate over one’s forecast time horizon. The problem comes with assessing the future free cash flow. It is a highly subjective and uncertain exercise.”

“Humility is the final edge.”

“I think that we only get estimates of the distributions and that we can only be somewhat sure of the estimates. That makes the problems in the financial world much more difficult, I think, because you have these uncertainties in the distributions.”

“It is not the certainty of disaster ahead but the uncertainty of better days to come that keeps the investor from buying.”

“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.”

“Equilibrium applies best only to markets that deal with known quantities. But financial markets deal with quantities that are not only largely unknown but unkownable.”

“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.”

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

“We use the term risk all too casually, and the term uncertainty all too rarely.”

“Diversification is a safety factor that is essential because we should be humble enough to admit we can be wrong.”

“A lifetime of investment research has taught me to become more and more humble about making predictions.”

“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.”

“Good investing requires humility and patience.”

“Humility is an enormously important quality. You can’t win without it. Survival in the end is where the winners are by definition, and survival begins with humility.”

“Volatility matters, because it defines the uncertainty of the price at which an asset will be liquidated.”

“The greatest tragedies occur when people forget about uncertainty.”

“Equities are a claim on uncertain future earnings.”

“We naturally fear the unknown, and the future is always unknown.”

“No matter how calm you are, no matter how long term an investor you are, no matter what your horizons, when the market is jumping around, you feel uncertainty in your gut and it’s hard to resist that.”

“The main thing that experience taught me was a sense of humility and an awareness of the importance of surprise, that is, unexpected things happen.”

“Risk in our world is nothing more than uncertainty about the decisions that other human beings are going to make and how we can best respond to those decisions.”

“At its root, risk is about mystery. It focuses on the unknown, for there would be no such thing as risk if everything were known.”

“It’s not uncertainty as such that bothers us, but unknowledge.”

“Corrections are unpredictable. By selling stocks to avoid pain, you can miss the next gain.”

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

“The best players are comfortable being uncertain.”

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

“Uncertainty actually is the friend of the buyer of long-term values.”