Volatility

“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.”

“Quotations fluctuate constantly, reacting often illogically to all sorts of temporary and even trivial influences.”

“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 true measure of common stocks values, of course, is not found by reference to price movements alone, but by price in relation to earnings, dividends, future prospects and, to a small extent, asset values.”

“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.”

“The true measure of common stock values, of course, is not found by reference to price movements alone, but by price in relation to earnings, dividends, future prospects and, to a small extent, asset values.”

“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.”

“We must remember that delusions swing between extremes, like pendulums. Delusions of grandeur and unending wealth give place to delusions of unending gloom. One is as unreal as the other.”

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

“It has been well and correctly remarked that the only things that go up in credit crisis and financial panic are correlations and volatility.”

“The biggest problem that people have isn’t selecting the right money managers. It’s the way they change managers all the time in response to fluctuations of short-term performance.”

“By owning great companies, you can just forget about all the noise and the irrational market fluctuations. And slowly get rich.”

“You have to learn to profit from market fluctuations rather than suffer from them.”

“One of the important factors behind the fluctuation between bull and bear markets, between booms and crashes and bubbles, is that investor memory has to fail us – and fail universally – in order for the extremes to be reached.”

“The pendulum of investment psychology is constantly fluctuating between optimism and pessimism, between greed and fear, between credulousness and skepticism, between risk tolerance and risk aversion.”

“The truth is markets are made up of people, with their emotions, insecurities, their tendency to go to extremes, and their other foibles. Thus, they often make mistakes and swing to erroneous extremes.”

“I think that the business about volatility being risk is a con job which was perpetrated primarily because volatility is machinable.”

“We like a reasonable amount of volatility. In our business we want some action.”

“Patterns of price movement are not random. However, they’re close enough to random so that getting some excess, some edge out of it, is not easy and not so obvious.”

“Day-to-day fluctuations in the profits of existing investments, which are obviously of an ephemeral and non-significant character, tend to have an altogether excessive, and even an absurd, influence on the market.”

“The biggest investment risk is not volatility, but permanent loss of capital.”

“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.”

“Risk is not volatility; risk is paying too much for a business”

“The goal is to make good returns with less risk. Risk is not the same as volatility. It’s very hard to measure risk.”

“I would like to see more volatility in the markets. Small shocks remind us that a bigger shock might occur. And, we protect ourselves to some extent.”

“Volatility is often a symptom of risk but is not a risk in and of itself. Volatility obscures the future but does not necessarily determine the future.”

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

“Volatility gets you in the gut. There’s no question that when prices are jumping around, you feel different from when they’re stable.”

“Volatility provokes the constant dread that some investors know more than we do, making us fearful of ignoring such powerful price movements.”

“I don’t think volatility is an altogether irrelevant proxy for risk, even though, to a cool, dispassionate investor with a long-term time horizon, volatility is wonderful.”

“Long-term bonds can be almost as volatile as stocks. They have their own corrections.”

“It’s worth reminding ourselves from time to time that gyrations in a stock price may tell us absolutely nothing about the prospects of the company involved.”

“No one can predict with any certainty which way the next 1,000 points will be. Market fluctuations, while no means comfortable, are normal.”

“The real problem is not finding a good fund manager, it’s finding the right time horizon for your investing and what your temperament is for volatility.”

“The obvious fact about security prices to any student of the market is that they fluctuate.”

“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.”

“Volatility is not risk. And historic volatility does not necessarily project future volatility.”

“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.”

“I got three ideas out of Ben’s book that have been the cornerstone of everything I’ve done, which are to look at stocks as part of a business rather than simply little things that go up and down. And then I took to heart his Mr. Market saga, which I think is vital to having the right attitude toward market fluctuations. Then third, the margin of safety.”

“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.”

“Market prices for stocks fluctuate at great amplitudes around intrinsic value but, over the long term, intrinsic value is virtually always reflected at some point in market price.”