Quotes

Establishing and maintaining an unconventional investment profile requires acceptance of uncomfortably idiosyncratic portfolios which frequently appear downright imprudent in the eyes of conventional wisdom.

Memory – and the resulting prudence – always comes out the loser when pitted against greed.

Pro-cyclical behavior is one of the greatest and one of the most frequent mistakes.

We should be very cautious in what we expect of our prescience.

When most people think about the future, they ignore that the future is a distribution of possibilities.

One of the important factors behind the fluctuation between bull and bear markets, between booms and crashes and bubbles, is that investor memory has to fail us – and fail universally – in order for the extremes to be reached.

The pendulum of investment psychology is constantly fluctuating between optimism and pessimism, between greed and fear, between credulousness and skepticism, between risk tolerance and risk aversion.

The truth is markets are made up of people, with their emotions, insecurities, their tendency to go to extremes, and their other foibles. Thus, they often make mistakes and swing to erroneous extremes.

I believe denying clients the ability to be hyper-traders is doing them a favor. Most people are not adept enough to take advantage of short-term mis-valuations, and I put myself in that category.

Waiting patiently is an essential part of being an investor. And when you do take action, do it dynamically, forcefully.

I believe it is highly possible to improve your long-term results by adjusting your investment position at the extremes of the cycle. Not that often. But at the extremes.

I don’t write to make investing easy. I write to show how hard it is so that people won’t try tricks that they can’t do.