Blogs & Comment

Quotable guide to passive investing (XIII)

Here is Part XIII of the Quotable Guide to Passive Investing. Part I is here. To scroll through Parts II to XII, click on links at the bottom of each page.
Where Are the Customers’ YachtsFred Schwed, Peter Arno, and Jason Zweig
“An out-of-town visitor was being shown the wonders of the New York financial district. When the party arrived at the Battery, one of his guides indicated some handsome ships riding at anchor. He said, ‘Look, those are the banker’s and brokers’ yachts.’ Asked the naive visitor: ”Where are the customers’ yachts?'”
“My tendency has been to buy stocks–When they show a profit I sell them exultantly. It seems to me at these moments that I have achieved life’s loveliest guerdon–making some money without doing any work.
Then a long time later it turns out that I should have just bought them, and thereafter I should have just sat on them like a fat, stupid peasant. A peasant however, who is rich beyond his limited dreams of avarice.”
“The trust officer of the great bank and trust company (in 1930s) happened to shake his pen over the stock page in the newspaper. He had his staff check and see what would have happened if stocks for the trust accounts had been chosen by ink spots instead of experts. The result showed that this method would have resulted in much less loss than that which had actually taken place.”
Winning With Index Mutual FundsJerry Tweddell and Jack Pierce
“Brokers are not paid to manage money: They are salespeople who receive commissions when they MOVE money.”
“Brokers are just as likely to discourage trading as your barber is to tell you you don’t need a haircut.”
“You don’t have to pay for an expert to invest successfully in index funds. With a very simple and basic understanding of index funds, you can consistently beat 70 to 80% of all professionally managed mutual funds.”
“Trust in time and forget market timing. Allow time to work its compounding magic for you: let market timing inflict its miseries on someone else.”
“Most academic studies have shown that investing in funds whose style or sector concentration is out-of-fashion is more profitable than those what are in vogue.”
“Keep it simple. Investment success depends on asset allocation, diversification, and risk management, not on complexity.”
Wise Investing Made SimpleLarry E. Swedroe
Despite its obvious importance to finance and investments, our education system almost totally ignores the field of finance and investments”
“We could compare a stockbroker to a bookie. They win whether you win or lose.”
“If you are trying to time the market or pick stocks, you are playing a losing game.”
“By investing in passively managed funds and adopting a simple buy, hold, and rebalance strategy, you are guaranteed to — outperform the majority of professional and individual investors.”
“It is not easy to get rich in Las Vegas, or Churchill downs, or at the local Merrill Lynch office.” (Paul Samuelson quote)
“Over the entire decade of the 1970s, 44 Wall Street was the top performing diversified U.S. Stock Fund. — 44 Wall Street ranked as the single worst performing fund of the 1980s.”
“Never treat the highly unlikely (a long, or even permanent, bear market) as impossible.” As evidence, in January 2007, the Nikkei Index was still down almost 60% from the 40,000 level it had hit in 1989.”
“If you want to see the greatest threat to your financial future, go home and take a look in the mirror.”
“It must be apparent to intelligent investors that if anyone possessed the ability to forecast the immediate trend of stock prices consistently and accurately, he would become a billionaire so quickly he would not find it necessary to sell his stock market guesses to the general public.”
“Cramer and CNBC attempt to make investing entertaining. After all, the goal of any television show is to attract the greatest number of viewers. — Investing was never meant to be entertaining.”
“We continue to make more money when snoring than when active.” (Warren Buffett quote)
“The hard part for most investors is ignoring the noise of the market, the Wall Street Establishment, the media and the emotions caused by all the noise.”
To be continued here.