As an investor, you have to deal with two risks: The risk of losing money, and the risk of missing out on opportunities. It’s the job of a good investor to balance the two… I think it’s better to turn cautious too soon rather than too late… It’s precisely when people can’t see what it is that could make things turn down that risk is the highest. It could be an economic slowdown, rising interest rates, the effect of central bank tightening, or geopolitical events. Or it could be “something else.” It’s always the things we don’t know about that really bite us in the end. — Howard Marks (source)

Stevenson, you remember, had a coward in his “Suicide Club” who threw dice with Death to enjoy the delights of fear, because when he escaped he tasted the intense joys of living. But he played once too often, did old Mr. Malthus. It is the same in stock gambling — the delightful uncertainty; the grim “now you see and now you don’t” of luck; the little chills of pleasure and the leaden sinking of disappointment; the exquisite expectancy — all this fires the blood of the young, as does love, and of the old, as love no longer can. The stock market “lambs” are like Mr. Malthus — when prices fluctuate they keenly enjoy the delight of riches because they have just jumped from the sorrow of nonpossession. But they too play once too often!

It may be accepted as axiomatically true that a man must possess a high degree of intelligence to be successful in commercial or professional pursuits. So must a Wall Street man, to win a fortune in the stock market and to keep it. But for an “outside” businessman to make a fortune in his vocation, and then to make another in the stock market, and keep both, requires positively the most extraordinary ability. Always on the wave of a general boom, outsiders come to Wall Street — and fail to display ordinary ability. They are ignorant of the basic principles of stock speculation. They are too late in going in and they overstay. They take unduly great risks. — Edwin Lefevre (source)

If you can get into a great company, stay in for a long time. That’s the easiest and biggest money you’ll possibly make. But it’s so hard to do, because they bid the great companies, or things that look like great companies, up so high that it makes that strategy not work… So that’s the trouble, is that they sell so high priced that they make it hard for you to get. But wouldn’t you expect that? Why would you expect that something everybody can see is a great company, of course they’re going to bid the price up so high that maybe it’s not such a good investment. — Charlie Munger (Source)