Quotes on Speculation

Buy only what you understand, believe in, and intend to stick with -- even when others are chasing the next miracle.

I know plenty of guys who consider themselves to be long-term investors but who are still perfectly happy to trade in and out and back into their favorite stocks.

The line I draw in the sand is that if an asset has cash flow or the likelihood of cash flow in the near term and is not purely dependent on what a future buyer might pay, then it’s an investment. If an asset’s value is totally dependent on the amount a future buyer might pay, then its purchase is speculation.

If the market's going wild and you want to be in it, you either have to lower your standards to stay in the game or you buy stuff which may not participate because it's not part of the game at that time.

The first task of the bargain hunter is to narrow the field and separate the solid prospects from the ones that are counting on hopes, prayers, and miracles.

Avoid long shots. I've bought about 30 long shots in my life. I've never broken even on one.

The average trader is naturally a chronic bull. It is human nature to prefer optimism to pessimism.

Fashions play their part in the stock market as in other affairs of life.

To lose money is the conventional penalty for bad judgment in speculation.

The stock market itself seems to be mainly driven by fashions and fads. However, when you look at individual stocks, it’s a different story, because individual stocks are much more diverse, and some of them can be predicted to perform well over the long run.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done.

Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation.

Speculation is a loser's game. Because of the costs, it has to be a loser's game.

The occupational disease of the speculator is acute uneasiness.

Almost any asset can be risky or safe, depending on how other investors treat it.

Speculation, I imagine, is a theme almost as popular as love; but in both cases most of the comments made are rather trite and not particularly helpful.

Speculative operations are all concerned with changes in price. In some cases the emphasis is on price changes alone, and in other cases the emphasis is on changes in value which are expected to give rise to changes in price.

Booms start with some tie-in to reality, some reason which justifies the increase in asset values, and then -- and this is the critical feature of speculative mood -- the market loses touch with reality.

Let us define the speculator as one who seeks to profit from market movements, without primary regard to intrinsic values; the "prudent stock investor" as one who (a) buys only at prices amply supported by underlying value, and (b) who determinedly reduces his stock holdings when the market enters the speculative phase of a sustained advance.

Participation in the stock market is not limited to the experienced, the conservative, nor even the intelligent. It is a game at which any number of people may play. And as the market level rises, the quantity of players grows rapidly and their quality diminishes somewhat in proportion.

The chief hazard of a careful common stock program is not that it may bring unexpected losses, but that its profits will turn the investor into a speculator greedy for quicker and bigger gains -- and therefore headed for ultimate disaster.

In the halcyon days of prosperity, the investor is satisfied with increased dividends and a rising market, and cares very little about dry statistics.

The typical experience of the speculator is one of temporary profit and ultimate loss.

Speculators often prosper through ignorance.

People without experience or superior ability may make a lot of money fast in the stock market, but they cannot keep what they make, and most of them will end up as net losers.

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

The higher the quality of a company the more inescapable is the speculative component in its price, and the more subject it is to wide price variations.

Let us define the speculator as one who seeks to profit from market movements, without primary regard to intrinsic value; the prudent stock investor as one who (a) buys only at prices amply supported by underlying value, and (b) who determinedly reduces his stock holdings when the market enters the speculative phase of a sustained advance.

When stocks are rising for no better reason than that they have risen, the greater fool is at work.

Market timing is speculating and it rarely, if ever, pays off.

If a common stock is a good investment it is also a good speculation.

Allied to the general pattern of market movements is the general pattern of speculative thinking.

If the relative stability of general business and corporate profits produces an unlimited enthusiasm and demand for common stocks, then it must eventually produce instability in stock prices.

Good common stocks are investment media which are subject to speculative influences. The speculative influences are not in the common stocks; they are in the minds of the people who buy and sell them.

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.