The tour we’ve taken through the last century proves that market irrationality of an extreme kind periodically erupts — and compellingly suggests that investors wanting to do well had better learn how to deal with the next outbreak.
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If you quantify, you won’t necessarily rise to brilliance, but neither will you sink to craziness.
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Don’t think for a moment that small investors are the only ones guilty of too much attention to the rear-view mirror.
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People are habitually guided by the rear-view mirror and, for the most part, by the vistas immediately behind them.
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At all times, in all markets, in all parts of the world, the tiniest change in rates changes the value of every financial asset.
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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.
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The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage.
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I am a better investor because I am a businessman, and a better businessman because I am an investor.
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When a manager with a reputation for brilliance tackles a business with a reputation for bad economics, the reputation of the business remains intact.
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Diversification is protection against ignorance, but if you don’t feel ignorant, the need for it goes down drastically.
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If somebody is going to be unfair with you in salary, they’re probably going to be unfair with you in a hundred other ways.
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There seems to be some perverse human characteristic that likes to make easy things difficult.
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The greater the potential reward in a value portfolio, the less risk there is.
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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.
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It is extraordinary to me that the idea of buying dollar bills for 40 cents takes immediately with people or doesn’t take at all.
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You’re not buying a stock, you’re buying part ownership in a business. You will do well if the business does well. And if you didn’t pay a totally silly price.
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If you risk something that is important to you for something that is unimportant to you it just doesn’t make sense.
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In business, you don’t have to do extraordinary things to get extraordinary results. You have to have a sound approach, but you don’t have to be brilliant.
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In the stock market, you don’t base your decisions on what the markets are doing, but on what you think is rational.
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Beating the market averages, after paying substantial costs and fees, is an against-the-odds game; yet a few people can do it, particularly those who view it as a game full of craziness with an occasional mispriced something or other.
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