Investors making purchases in an overheated market need to recognize that it may often take an extended period for the value of even an outstanding company to catch up with the price they paid.
Warren BuffettRead
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Investors making purchases in an overheated market need to recognize that it may often take an extended period for the value of even an outstanding company to catch up with the price they paid.
The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.
Investors must keep in mind that there's a difference between a good company and a good stock. After all, you can buy a good car but pay too much for it.
You have to make the shift from being a consumer in the economy to becoming an owner-and you do it by becoming an investor.
Those who have experienced good and bad luck many times have every reason to be skeptical of successes
I'm only rich because I know when I'm wrong.
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.
Because investors are not usually penalized for adhering to conventional practices, doing so is the less professionally risky strategy, even though it virtually guarantees against superior performance.
Value in relation to price, not price alone, must determine your investment decisions. If you look to Mr Market as a creator of investment opportunities (where price departs from underlying value), you have the makings of a value investor. If you insist on looking to Mr Market for investment guidance however, you are probably best advised to hire someone else to manage your money.
The trick of successful investors is to sell when they want to, not when they have to.
While good business ideas are plentiful, many entrepreneurs struggle to understand payroll taxes, health care and other thorny issues… In other words, they don't have the financial literacy to scale their businesses and attract investors.
Never invest in a business you can't understand
If you're prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won't get bored.
If you have more than 120 or 130 I.Q. points, you can afford to give the rest away. You don't need extraordinary intelligence to succeed as an investor.
Investors should always keep in mind that the most important metric is not the returns achieved but the returns weighed against the risks incurred. Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.
The Internet doesn't change everything. It doesn't change supply and demand. It doesn't magically allow you to build businesses by turning investors' money into operating expenses indefinitely. The money always runs out eventually.. the Internet doesn't change that, as we have seen.
SUPPOSE that an investor you admire and trust comes to you with an investment idea. This is a good one, he says enthusiastically. I'm in it, and I think you should be, too.
The ability to say no is a tremendous advantage for an investor.
Markets can remain irrational longer than you can remain solvent.
There's a tendency to look at investments in isolation. Investors focus on the risk of individual securities.
All of us would be better investors if we just made fewer decisions.
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