Top 100 Investor Quotes of All Time

The majority of people have no idea where to begin when it comes to investing. Fortunately, we can learn from great investors both past and present. These investment quotations range from Benjamin Franklin to contemporary experts such as David Tepper and Jeffrey Gundlach. The 100 quotations included in this collection have been chosen for their enduring significance. While markets fluctuate, this investment advice remains constant.

KEY TAKEAWAYS

• Successful investors all have one thing in common — they have rules.
• Notable investors like Warren Buffett say to focus on fundamentals and management quality before looking at the price of a stock.
• Other major investors advise on betting big when you have an edge and to always use risk management.

Howard Marks: Understand Market Cycles

Howard Stanley Marks (born April 23, 1946) is an American investor and writer. He is the co-founder and co-chairman of Oaktree Capital Management, the largest investor in distressed securities worldwide. Marks is admired in the investment community for his “memos”, which detail his investment strategies and insight into the economy and are posted publicly on the Oaktree website.

The most dangerous thing is to buy something at the peak of its popularity. At that point, all favorable facts and opinions are already factored into its price and no new buyers are left to emerge.

If one is approached with a deal predicated on cycles having ceased to occur, remember that invariably that’s a losing bet.

It’s worth noting that the assumption that something can’t happen has the potential to make it happen, since people who believe it can’t happen will engage in risky behavior, and thus alter the environment.

There’s only one way to describe most investors: trend followers.

In bubbles, infatuation with market momentum takes over from any notion of value and fair price, and greed (plus the pain of standing by as others make seemingly easy money) neutralizes any prudence that might otherwise hold sway.

Benjamin Graham: Market Psychology

Benjamin Graham (May 9, 1894 — September 21, 1976) was a British-born American economist, professor and investor. He is widely known as the “father of value investing”, and wrote two of the founding texts in neoclassical investing: Security Analysis (1934) with David Dodd, and The Intelligent Investor (1949). His investment philosophy stressed investor psychology, minimal debt, buy-and-hold investing, fundamental analysis, concentrated diversification, buying within the margin of safety, activist investing, and contrarian mindsets.

The intelligent investor is a realist who sells to optimists and buys from pessimists.

In the short run, the market is a voting machine but in the long run, it is a weighing machine.

An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.

But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.

As the Danish philosopher Søren Kierkegaard noted, life can only be understood backwards — but it must be lived forwards.

David Tepper: Be Greedy When Others Are Fearful

David Alan Tepper (born September 11, 1957) is an American billionaire businessman, hedge fund manager, and philanthropist. Arguably the greatest hedge fund manager of his generation. He initially became interested in the stock market as a young boy watching his father trade stocks in his hometown of Pittsburgh. Today, as president and founder of Appaloosa Management, Tepper has earned an international reputation for producing some of the highest returns amongst fund managers on Wall Street.

I think when it comes to decisions, I try not to be emotional. To drown out the noise and look at the important facts.

The key is to wait. Sometimes the hardest thing to do is to do nothing.

Those who keep their heads while others are panicking do well.

For 15, 17 years you had a river flowing one way, just flowing, you could just say a money flow, reserves got up to $10–11 trillion around the world, sometime this year, you had the reserves flowing the other way what happens when you have two bodies of water flowing different ways? What do you get? You get turbulence, you get waves.

I knew I wanted to invest. I liked investing and you know, junk bonds. I just fell into it and it was kind of hot. But it was what I liked. I wanted to invest and I’m still doing it and I like doing it, so you’ve got to do what you like.

Seth Klarman: Value Investing like Graham

Seth Andrew Klarman (born May 21, 1957) is an American billionaire investor, hedge fund manager, and author. He is a proponent of value investing. He is the chief executive and portfolio manager of the Baupost Group, a Boston-based private investment partnership he founded in 1982.

He closely follows the investment philosophy of Benjamin Graham and is known for buying unpopular assets while they are undervalued, seeking a margin of safety and profiting from any rise in price. Since his fund’s $27 million-dollar inception in 2008, he has realized a 20% compounded return on investment. He manages $27 billion in assets.

In investing it is never wrong to change your mind. It is only wrong to change your mind and do nothing about it.

The stock market is the story of cycles and of the human behavior that is responsible for overreactions in both directions.

The way to maximize outcome is to focus on the process.

The near absence of bargains works as a reverse indicator for us. When we find there is little worth buying, there is probably much worth selling.

Loss avoidance must be the cornerstone of your investment philosophy.

James Chanos: Intensive Research

James Steven Chanos (born December 24, 1957) is an American investment manager. He is the founder and managing partner of Kynikos Associates. Mr. Chanos opened Kynikos Associates in 1985 to implement investment strategies he had uncovered while beginning his Wall Street career as a financial analyst with Paine Webber, Gilford Securities, and Deutsche Bank. Throughout his investment career, Mr. Chanos has identified and sold short the shares of numerous well-known corporate financial disasters; among them, Baldwin-United, Commodore International, Coleco, Integrated Resources, Boston Chicken, Sunbeam, Conseco, and Tyco International. His celebrated short-sale of Enron shares was dubbed by Barron’s as “the market call of the decade, if not the past fifty years.”

I’ve learned there’s a big difference between a long-focused value investor and a good short-seller. That difference is psychological and I think it falls into the realm of behavioral finance.

I’ve seen a lot more go to zero than infinity.

I call it the Rule of Three. If you read a company’s financial statements three times, and you still can’t figure out how they make their money, that’s usually for a reason.

I’ll always understand the Schadenfreude aspect to short-selling. I get that no one will always like it. I’m also convinced to the deepest part of my bones that short-selling plays the role of real-time financial watchdog. It’s one of the few checks and balances in the market.

What we define as a bubble is any kind of debt-fueled asset inflation where the cash flow generated by the asset itself — a rental property, office building, condo — does not cover the debt incurred to buy the asset. So you depend on a greater fool, if you will, to come in and buy at a higher price.

Peter Lynch: Invest In What You Know

Peter Lynch (born January 19, 1944) is an American investor, mutual fund manager, and philanthropist. As the manager of the Magellan Fund at Fidelity Investments between 1977 and 1990, Lynch averaged a 29.2% annual return, consistently more than double the S&P 500 stock market index and making it the best-performing mutual fund in the world. During his 13-year tenure, assets under management increased from US$18 million to $14 billion.

A proponent of value investing, Lynch wrote and co-authored a number of books and papers on investing strategies, including One Up on Wall Street, published by Simon & Schuster in 1989, which sold over one million copies.

In the long run, it’s not just how much money you make that will determine your future prosperity. It’s how much of that money you put to work by saving it and investing it.

Go for a business that any idiot can run — because sooner or later, any idiot probably is going to run it.

Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.

The list of qualities (an investor should have) include patience, self-reliance, common sense, a tolerance for pain, open-mindedness, detachment, persistence, humility, flexibility, a willingness to do independent research, an equal willingness to admit mistakes, and the ability to ignore general panic.

Never invest in a company without understanding its finances. The biggest losses in stocks come from companies with poor balance sheets.

Jesse Lauriston Livermore: The Wolf of Wall Street

Jesse Lauriston Livermore (July 26, 1877 — November 28, 1940) was an American stock trader. He is considered a pioneer of day trading and was the basis for the main character of Reminiscences of a Stock Operator, a best-selling book by Edwin Lefèvre. At one time, he was one of the richest people in the world; however, at the time of his suicide, he had liabilities greater than his assets.

In a time when accurate financial statements were rarely published, getting current stock quotes required a large operation, and market manipulation was rampant, Livermore used what is now known as technical analysis as the basis for his trades. His principles, including the effects of emotion on trading, continue to be studied.

Just remember, without discipline, a clear strategy, and a concise plan, the speculator will fall into all the emotional pitfalls of the market — jump from one stock to another, hold a losing position too long, and cut out of a winner too soon, for no reason other than fear of losing profit. Greed, Fear, Impatience, Ignorance, and Hope will all fight for mental dominance over the speculator. Then, after a few failures and catastrophes the speculator may become demoralised, depressed, despondent, and abandon the market and the chance to make a fortune from what the market has to offer.

After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!

There is time to go long, time to go short and time to go fishing.

The stock market is never obvious. It is designed to fool most of the people, most of the time.

Remember this: When you are doing nothing, those speculators who feel they must trade day in and day out, are laying the foundation for your next venture. You will reap benefits from their mistakes.

Paul Tudor Jones: Conservative Investor

Paul Tudor Jones II (born September 28, 1954) is an American billionaire hedge fund manager, conservationist and philanthropist. In 1980, he founded his hedge fund, Tudor Investment Corporation, an asset management firm headquartered in Stamford, Connecticut. One of Jones’ earliest and major successes was predicting Black Monday in 1987, tripling his money during the event due to large short positions.

Peter Borish was second-in-command to Jones at Tudor Investment Corporation. Jones said Borish anticipated the crash in 1987 because Borish had mapped the 1987 market against the market preceding the 1929 crash, and noted the similarity between the two markets.

I’m always thinking about losing money as opposed to making money. Don’t focus on making money, focus on protecting what you have

The most important rule is to play great defense, not great offense. Everyday I assume every position I have is wrong. I know where my stop risk points are going to be. I do that so I can define my maximum drawdown. Hopefully, I spend the rest of the day enjoying positions that are going in my direction. If they are going against me, then I have a game plan for getting out.

If I have positions going against me, I get right out; if they are going for me, I keep them Risk control is the most important thing in trading. If you have a losing position that is making you uncomfortable, the solution is very simple: Get out, because you can always get back in.

I believe the very best money is made at the market turns. Everyone says you get killed trying to pick tops and bottoms and you make all your money by playing the trend in the middle. Well for twelve years I have been missing the meat in the middle but I have made a lot of money at tops and bottoms.

The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge.

Stanley Druckenmiller: Top Down Investing

Stanley Freeman Druckenmiller is an American investor, hedge fund manager and philanthropist. He is the former chairman and president of Duquesne Capital, which he founded in 1981. He closed the fund in August 2010 after 30 years of trading operations without a losing year. At the time of closing, Duquesne Capital had over $12 billion in assets.

The way to build superior long-term returns is through preservation of capital and home runs…When you have tremendous conviction on a trade, you have to go for the jugular. It takes courage to be a pig.

Soros is the best loss taker I’ve ever seen. He doesn’t care whether he wins or loses on a trade. If a trade doesn’t work, he’s confident enough about his ability to win on other trades. There are a lot of shoes on the shelf; wear only the ones that fit. If you’re extremely confident, taking a loss doesn’t bother you.

I’ve learned many things from him [George Soros], but perhaps the most significant is that it’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.

Earnings don’t move the overall market; it’s the Federal Reserve Board… focus on the central banks, and focus on the movement of liquidity… most people in the market are looking for earnings and conventional measures. It’s liquidity that moves markets.

I’ve always loved to play games, and face it: investing is one big game. You need to be decisive, open-minded, flexible and competitive.

Jeffrey Gundlach: Allocate Smartly

Jeffrey Edward Gundlach (born October 30, 1959) is an American investor and businessman. He is the founder of DoubleLine Capital LP, an investment firm. In 2011, he appeared on the cover of Barron’s as “The New Bond King.” In 2013, Institutional Investor named him “Money Manager of the Year.” In 2012, 2015 and 2016, he was named one of “The Fifty Most Influential” in Bloomberg Markets. In 2017, he was inducted into the FIASI Fixed Income Hall of Fame. Mr. Gundlach is a summa cum laude graduate of Dartmouth College, with degrees in Mathematics and Philosophy.

The trick is to take risks and be paid for taking those risks, but to take a diversified basket of risks in a portfolio.

When you’re in a major market downturn, the beta eats the alpha.

This is a good result and a great risk-adjusted result given the low risk nature of pair trades.

Things are shaky and feeling dangerous, i am not selling gold.

This is not a trader’s market, it is a freight train that you want to stay in sync with. There’s too much order and belief in markets in spite of big losses.

Bill Gross: Portfolio Construction

Bill Gross (born April 13, 1944) is an American investor and fund manager, best known for co-founding Pacific Investment Management Co. Bill Gross, or „King of bonds, “how some call him, is one of the most influential and followed investors in the bond market. Since its beginning in 1982, PIMCO has become the largest fixed-income Management Company in the world with fixed-income assets of 600 billion dollars.

His contributions in improving bond and portfolio analysis got him to be the first portfolio manager in the hall of fame, by Fixed-Income Analyst Society Inc (FIASI) in 1996.

The market can move for irrational reasons, and you have to be prepared for that, … you need to make big bets when the odds are in your favor — not big enough to ruin you, but big enough to make a difference.

Bond investors are the vampires of the investment world. They love decay, recession — anything that leads to low inflation and the protection of the real value of their loans.

Bonds despite their ridiculous yields will not easily be threatened with a new bear market.

Both from the standpoint of stocks and bonds, an investor wants to go where the growth is.

When does money run out of time? The countdown begins when investable assets pose too much risk for too little return; when lenders desert credit markets for other alternatives such as cash or real assets.

Kyle Bass: Risk/Reward

Kyle Bass(born September 7, 1969) іѕ bеѕt-knоwn аѕ thе сhіеf іnvеѕtmеnt оffісеr аnd thе fоundеr оf thе ‘Науmаn Саріtаl Маnаgеmеnt’. Bass’s most famous trade was to buy large amounts of credit default swaps (CDS) on US subprime mortgage securities in the run up to the US financial crisis. Since CDSs are insurance for a security defaulting, this was equivalent to betting against them. The trade made around $500m in profits for Hayman, helping it return over 200% in 2007. He was also one of the first to raise the possibility that Greece would default on its debt.

Between 2006 and the start of 2017, Hayman delivered an annual return of 16.5% over 11 years. By contrast, the stock market returned 9.4% a year during the same period.

Buying gold is just buying a put against the idiocy of the political cycle. It’s that simple.

The key is to do your own work.

Zimbabwe’s stock market was the best performer this decade — but your entire portfolio now buys you 3 eggs.

A rolling loan gathers no loss.

Fundamentally, it’s about the social fabric of the world…what does this all mean? It means war.

George Soros: Reflexivity

George Soros (born György Schwartz, August 12, 1930) is a financial titan who survived Nazi Germany-occupied Hungary and emigrated to the United Kingdom in 1947. Years later, after graduating from the London School of Economics, Soros began his professional career working for various merchant banks in the United Kingdom and the United States before launching his first hedge fund, Double Eagle, in 1969.

With the profits from this endeavor, Soros was able to seed his follow-up hedge fund, Soros Fund Management, in 1970. Since renamed the Quantum Fund, it ran from 1973 to 2011, during which time it returned roughly 20% to investors annually, boasting total net gains of more than $43 billion.

Stock market bubbles don’t grow out of thin air. They have a solid basis in reality, but reality as distorted by a misconception.

Economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is to recognize the trend whose premise is false, ride that trend and step off before it is discredited.

I’m not better than the next trader, just quicker at admitting my mistakes and moving on to the next opportunity.

There is no point in being confident and having a small position.

Start by assuming the market is always wrong, so if you copy everybody else on Wall Street, you’re doomed to do poorly.

Edward Thorp: Statistics & Math

Edward Oakley Thorp (born August 14, 1932) is an American mathematics professor, author, hedge fund manager, and blackjack researcher. He pioneered the modern applications of probability theory, including the harnessing of very small correlations for reliable financial gain. In May 1998, Thorp reported that his personal investments yielded an annualized 20 percent rate of return averaged over 28.5 years. He also pioneered the use of quantitative investment techniques in the financial markets.

His domination in the financial world began in the casino. Thorp figured out how to beat the most “unbeatable” games. In roulette, he created a wearable computer that gave him a 44% edge. And in blackjack, he developed the very first card counting system that’s still widely used today.

These gambling skills transferred perfectly to markets. Thorp’s first hedge fund, Princeton Newport Partners, never had a down year. It compounded money at 19.1% for almost 20 years — destroying the S&P 500.

His second fund, which he ran from August 1992 to September 2002, performed just as well with an annualized return of 18.2%.

I also learned the value of withholding judgement until I could make a decision based on evidence.

I think that we only get estimates of the distributions and that we can only be somewhat sure of the estimates. That makes the problems in the financial world much more difficult, I think, because you have these uncertainties in the distributions.

There are inefficiencies in the market, but they’re not easy to demonstrate, and I think that needs to be done before one shifts money in that direction.

If we lost 5 percent, we would shrink our positions. If we lost another few percent, we would shrink our positions more. The program would therefore gradually shut itself down, as we got deeper in the hole, and then it had to earn its way out.

You have to decide ahead of time how much of a drawdown would imply that the system is not as good as you thought it was, and therefore shouldn’t be traded.

Jeremy Grantham: Reversion To The Mean

Robert Jeremy Goltho Grantham (born 6 October 1938) is a British investor and co-founder and chief investment strategist of Grantham, Mayo, & van Otterloo (GMO), a Boston-based asset management firm.

Grantham’s investment philosophy can be summarized by his commonly used phrase “reversion to the mean.” Essentially, he believes that all asset classes and markets will revert to mean historical levels from highs and lows. His firm seeks to understand historical changes in markets and predict results for seven years into the future. When there is deviation from historical means (averages), the firm may take an investment position based on a return to the mean. The firm allocates assets based on internal predictions of market direction.

Grantham gained influence as an investor after correctly calling the dotcom bubble in 2000 and the market’s dramatic downturn in 2008.

Remember that history always repeats itself. Every great bubble in history has broken. There are no exceptions.

I believe the only things that really matter in investing are the bubbles and the busts.

I would say that financial markets are very inefficient, and capable of extremes of being completely dysfunctional.

You don’t get rewarded for taking risk; you get rewarded for buying cheap assets. And if the assets you bought got pushed up in price simply because they were risky, then you are not going to be rewarded for taking a risk; you are going to be punished for it.

Market timing, by the way, is a tag some buy-and-hold investors use to put down anything that involves using your brain. These are the same people who like to watch the locomotive coming and get run down in the name of discipline.

Daniel Loeb: Turnaround Investing

Daniel Seth Loeb (born December 18, 1961) is an American investor, hedge fund manager, and philanthropist. He is the founder and chief executive of Third Point, a New York-based hedge fund focused on event-driven, value-oriented investing with $14.8 billion in assets under management, as of June 2019. New York magazine noted that Loeb’s “preferred strategy” is to buy into troubled companies, replace inefficient management, and return the companies to profitability, which “is the key to his success.” Loeb was described as “one of the most successful activists” in 2014.

On Wall Street, Loeb has a reputation for “financial savvy” and for “his withering criticism of corporate executives who are unfortunate enough to stumble in his sights”.

The only thing I do know is that from chaos comes opportunity.

In order to be a really good investor, you need to be a little bit of a philosopher as well.

We invest wherever we see some kind of special situation element, an event that will either help create the investment opportunity or help to realize the opportunity.

A manager that has become overconfident by using a bad process is like somebody who plays Russian roulette three times in a row without the gun going off, and thinks they’re great at Russian roulette. The fourth time, they blow their brains out.

Note to the salesmen out there — be aggressive. I literally cold-called him at home, when [David Tepper] had no job. So by the time he started Appaloosa, I had established the relationship with him. He became my biggest client. I was his biggest salesman.

Larry Williams: Understanding Market Patterns

Larry Williams (born on October 6, 1942) is the author of 11 books, most on stocks and commodity trading. He is a past board member of the National Futures Association and the recipient of numerous awards, including Futures Magazine’s first Doctor of Futures Award, the Omega Research Lifetime Achievement Award, Significant Sig (a Sigma Chi acknowledgement), Traders International 2005 Trader of the Year, on October 6, 2002 the mayor of San Diego declared that day as Larry Williams’ Day, and 2014 MTA (Market Technicians Association) Man of the Year Award.

Williams has created numerous market indicators, including Williams %R, Ultimate Oscillator, COT indices, accumulation/distribution indicators, cycle forecasts, market sentiment, and value measurements for commodity prices. Williams won the 1987 World Cup Championship of Futures Trading from the Robbins Trading Company, where he turned $10,000 to over $1,100,000 (11,300%) in a 12-month competition with real money. Ten years later, his daughter, actress Michelle Williams, won the same contest.

The next time you see an outside day with a down close lower than the previous day, don’t get scared, get ready to buy!

What you will be looking for is a day that closes above the prior day’s high and most likely ‘breaks’ out to the upside to close above a trading range. This is the twitching worm that causes the public to leap before they look.

The moment you learn to trade reality, not desire, you will drill a wall of fire to become a successful trader.

The three traits speculators must learn to manage within themselves are confidence, fear, and aggressiveness.

People who make their living looking into crystal balls are destined to eat a lot of broken glass.

Bill Ackman: Contrarian

William Albert Ackman (born May 11, 1966) is an American investor and hedge fund manager. He is the founder and CEO of Pershing Square Capital Management, a hedge fund management company.

Ackman has said that his most successful investments have always been controversial, and that his first rule of activist investing is to “make a bold call that nobody believes in”.

I am always prepared to do the right thing regardless of what other people think.

Investing is a business where you can look very silly for a long period of time before you are proven right.

I’m not emotional about investments. Investing is something where you have to be purely rational and not let emotion affect your decision making — just the facts.

In order to be successful, you have to make sure that being rejected doesn’t bother you at all.

You can learn investing by reading books.

Bruce Berkowitz: Value Investing

Bruce R. (Robert) Berkowitz is an American equity fund manager and registered investment adviser. Berkowitz founded Fairholme Capital Management in 1997 and was formerly a senior portfolio manager at Lehman Brothers Holdings and a managing director of Smith Barney. Berkowitz was named 2009 Domestic-Stock Fund Manager of the Year and Domestic-Stock Fund Manager of the Decade by Morningstar, Inc.

Bruce Berkowitz concentrates his investments in a relatively small number of companies. He thinks that the more diversified the portfolio, the more likely the performance will be average. He likes companies with great managers, and deeply undervalued stocks. Benjamin Graham’s “The Intelligent Investor” serves as the inspiration for Berkowitz’ investment strategy. He focuses investments on companies that have exceptional management, that generate free cash, and that are cheaply priced.

We’re non-diversified. We focus. Why not buy more of your best idea rather than your 60th best idea? How many companies can I really know well over time and focus on, on a daily basis?

There are two hedges I know of; one is cash and the other is knowledge.

When companies start measuring success by clicks that doesn’t compute to us, the only thing that computes to us is cash.

I’m not interested in meeting management today… I’m more interested in finding out how a person has behaved in the past.

You only need a few good ideas to make a significant difference in a lifetime.

Joel Greenblatt: Margin Of Safety

Joel Greenblatt (born December 13, 1957) is an American academic, hedge fund manager, investor, and writer. He is a value investor, alumnus of the Wharton School of the University of Pennsylvania, and adjunct professor at the Columbia University Graduate School of Business. He runs Gotham Funds with his partner, Robert Goldstein.

Choosing individual stocks without any idea of what you’re looking for is like running through a dynamite factory with a burning match. You may live, but you’re still an idiot.

The secret to investing is to figure out the value of something — and then pay a lot less.

Remember, it’s the quality of your ideas not the quantity that will result in the big money.

The more confidence I have in each one of my stock picks, the fewer companies I need to own in my portfolio to feel comfortable.

So one way to create an attractive risk/reward situation is to limit downside risk severely by investing in situations that have a large margin of safety. The upside, while still difficult to quantify, will usually take care of itself. In other words, look down, not up, when making your initial investment decision. If you don’t lose money, most of the remaining alternatives are good ones.

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