Wall Street

“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.”

“You never get a bubble until the public, the brokerage community, the financial institutions, the pension funds, and even the universities are all involved.”

“I think that accounting is a very serious issue in a lot of companies. The need to make profits every quarter and to meet analysts’ estimates can be a debilitating force.”

“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.”

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

“The problem is not whether price changes should be disregarded — because clearly they should not be — but rather in what way can the investor and the security analyst deal intelligently with the price changes which take place.”

“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.”

“To my mind, the so-called growth-stock investor — or the average security analyst for that matter — has no idea of how much to pay for a growth stock, how many stocks to buy to obtain the desired return, or how their prices will behave.”

“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.”

“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.”

“The security analyst can only give you certain hints as to what the solution is likely to be, certain indications of a range of value rather than a specific figure, and perhaps a diffident suggestion as to where within this range he believes the probabilities of the future will lie.”

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

“One of the things we tell our analysts is, if it’s in the papers, it’s in the price. Meaningful price changes only occur when new, previously unexpected information appears.”

“The market doesn’t lack for analysts and commentators who mine the data for patterns and declare how the future will look based on how past patterns evolved. I wish it was that easy.”

“As I often remind our analysts, 100% of the information you have about a company represents the past, and 100% of the value depends on the future.”

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

“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.”

“There are huge advantages for an individual to get into a position where you make a few great investments and just sit back. You’re paying less to brokers. You’re listening to less nonsense.”

“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.””

“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.”

“A man who has bought a stock against the advice of a conservative broker, and has doubled his money in a fortnight, finds his suspicions turned into convictions by the impartial judge, the stock ticker.”

“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.”

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

“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.”

“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.”

“When investors — individual and institutional alike — engage in far more trading –inevitably with one another — than is necessary for market efficiency and ample liquidity, they become, collectively, their own worst enemies.”

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

“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.”

“The difficulty of determining what any stock is really worth is very great indeed. No two security analysts will agree on the worth of a stock, or even on the definition of the word.”

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

“The whole institutional structure of the marketplace rests on the assumption that the other side of the trade will always be there; without that assumption, even the gutsiest of market-makers would refuse to stay in business.”

“The market at this point is institutional and we all act like a herd.”

“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.”

“There’s a psychological benefit to tossing the bums out: The names disappear from the monthly brokerage statements; we’re no longer reminded of our mistakes.”

“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.”

“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.”

“Institutional investing, as it is structured today, simply makes it more difficult to make a high-conviction, long-term decision than to make a low-conviction, short-term decision. The rewards of short-term results substantially superior to the market, and the penalties of short-term results well below the market, are awesome.”

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

“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.”

“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.”

“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.”