Sunday, October 19, 2014

Top 20 Quotes From The Intelligent Investor

Some excellent advice, culled from 74 Quotes From The Intelligent Investor, Revised Edition, via BadBlue Money.

20. If fees consume more than 1% of your assets annually, you should probably shop for another adviser.

19. There is no reason to feel any shame in hiring someone to pick stocks or mutual funds for you. But there’s one responsibility that you must never delegate. You, and no one but you, must investigate whether an adviser is trustworthy and charges reasonable fees.

18. The distinction between investment and speculation in common stocks has always been a useful one and its disappearance is cause for concern.

17. Wall Street has a few prudent principles; the trouble is that they are always forgotten when they are most needed.

16. Never mingle your speculative and investment operations in the same account nor in any part of your thinking.

15. Thousands of people have tried, and the evidence is clear: The more you trade, the less you keep.

14. No matter how careful you are, the one risk no investor can ever eliminate is the risk of being wrong. Only by insisting on what Graham called the “margin of safety” – never overpaying, no matter how exciting an investment seems to be – can you minimize your odds of error.

13. We urge the beginner in security buying not to waste his efforts and his money in trying to beat the market. Let him study security values and initially test out his judgment on price versus value with the smallest possible sums.

12. ...for most investors, market timing is a practical and emotional impossibility.

11. It should be remembered that a decline of 50% fully offsets a preceding advance of 100%.

10. To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework.

9. Even the intelligent investor is likely to need considerable will power to keep from following the crowd.

8. Confusing speculation with investment is always a mistake.

7. A speculator gambles that a stock will go up in price because somebody else will pay even more for it.

6. An investor calculates what a stock is worth, based on the value of its businesses.

5. We have not known a single person who has consistently or lastingly make money by thus “following the market”. We do not hesitate to declare this approach is as fallacious as it is popular

4. Never buy a stock because it has gone up or sell one because it has gone down.

3. Diversification is an established tenet of conservative investment.

2. To enjoy a reasonable chance for continued better than average results, the investor must follow policies which are (1) inherently sound and promising, and (2) not popular on Wall Street.

1. Before you place your financial future in the hands of an adviser, it’s imperative that you find someone who not only makes you comfortable but whose honesty is beyond reproach.

You can read all of the quotes here.

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