The Importance of having a Long-Term Time Horizon
“It is just appalling the nerve strain people put themselves under trying to buy something today and sell it tomorrow. It’s a small-win proposition. If you are a truly long-range investor, of which I am practically a vanishing breed, the profits are so tremendously greater.” – Phil Fisher
“The single greatest edge an investor can have is a long-term orientation.” – Seth Klarman
“If you look carefully, almost all Old Money secrets can be traced to a single source: a longer-term outlook.” – Bill Bonner
“A good idea, a long-term perspective, and the creativity to implement a strategy to profit from your insight are necessary to prosper in finance.” – Leon Levy
“Over the last few decades, investors’ timeframes have shrunk. They’ve become obsessed with annual, even quarterly returns. In fact, technology now enables them to become distracted by returns on a daily basis, and even minute-by-minute. Thus, one way to gain an advantage is by ignoring the ‘noise’ created by the manic swings of others and focusing on the things that matter in the long term.” – Howard Marks
The Folly of Forecasts
“I don’t let people do projections for me because I don’t like throwing up on the desk.” – Charlie Munger
“People have always had this craving to have someone tell them the future. Long ago, kings would hire people to read sheep guts. There’s always been a market for people who pretend to know the future. Listening to today’s forecasters is just as crazy as when the king hired the guy to look at the sheep guts. It happens over and over and over.” – Charlie Munger
“Forecasting (noun): “The attempt to predict the unknowable by measuring the irrelevant.” – Jason Zweig
“One of my greatest complaints about forecasters is that they seem to ignore their own records. When did you ever see a market forecaster’s track record?” The amazing thing to me is that these people will go on making predictions with a straight face, and the media will continue to carry them.” – Howard Marks
“Accepting that we cannot predict the future – i.e.; there will always be unexpected and highly consequential events – is the first step to becoming less fragile and more adaptable. People should be highly skeptical of anyone’s, including their own, ability to predict the future and instead pursue strategies that can survive whatever may occur.” – Seth Klarman
“It is worth reminding oneself from time to time that almost any description and every prediction about the U.S. stock market involves a gross oversimplification of an extraordinarily complex system, a system that adaptively incorporates the collective expectations of all its participants into the price of its securities.” – Bill Miller
On Keeping Things Simple
“Try more to profit from understanding the obvious rather than searching for the esoteric. … It is remarkable how much long-term advantage is conveyed to people who try to be consistently not stupid, instead of trying to be very intelligent. There must be some wisdom in the folk saying, ‘It’s the strong swimmers who drown.’” – Charlie Munger
“Simplicity is the ultimate sophistication” – Leonardo da Vinci
“Perfection is reached not when there is nothing left to add, but when there is nothing left to take away!” – Antoine de Saint-Exupéry
When the dumb money realizes how dumb it is and buys an index fund, it becomes smarter than the smartest money, and typically outperforms about three-quarters of the street’s brightest and highest paid stars.” – John Bogle
Avoid Unnecessary Activity
All man’s troubles derive from one thing: his inability to know how to sit still in one room. – Blaise Pascal
“Running inside of a moving bus won’t get you to your destination quicker.” – Warren Buffett
“After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It was never my thinking that made the big money for me. It was always my sitting. Got that? My sitting tight! …Men who can be both right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after an investor has firmly grasped this that he can make big money” – Jesse Livermore
The hardest work in investing is not intellectual; it’s emotional. Benign neglect is, for most investors, the secret of long-term success. – Charley Ellis
Do you know what investing for the long run but listening, and reacting to, daily market news is like? It’s like a man walking up a big hill with a yo-yo and keeping his eyes fixed on the yo-yo instead of the hill.” – Alan Abelson
The stock market is a device for transferring money from the impatient to the patient. We continue to make more money when snoring than when active. – Warren Buffett
Money is like a bar of soap. The more you handle it, the less you will have. – Eugene Fama