Investment Education

A Short and Simple Rational Investing Quotes Form World’s Most Successful Investor Warren Buffett

A Short and Simple Rational Investing Quotes Form World’s Most Successful Investor Warren Buffett

  • When we own portions of outstanding businesses with outstanding Managements, our favorite holding period is forever.
  • Do not take yearly results too seriously. Instead, focus on four-or five-year averages.
  • If you feel that you can dance in and out of securities in a way that defeats the inflation tax, I would like to be your broker—but not your partner.
  • If past history was all there was to the game, the richest people would be librarians.
  • Market forecasters will fill your ear but never fill your wallet.
  • Draw a circle around the businesses you understand and then eliminate those that fail to qualify on the basis of value, good management, and limited exposure to hard times.
  • I read annual reports of the company I’m looking at, and I read the annual reports of the competitors—that is the main source of material.
  • Problems in a company are like cockroaches in the kitchen. “You will never find just one.”
  • If you are in a poker game and after 20 minutes you don’t know who the patsy is, then you’re the patsy.

(Source : My Warren Buffett Bible By Robert L. Bloch, Ebook ISBN: 978-1-63450-994-7) 

These 10 Investment Principal Will Help You Beat the Market

These 10 Principles Will Help You Beat the Market

By one of Well known Indian investor who turned Rs 10 lakh to 650 crore in 20 years of investments at compounding rate of 55% pa.

In his talk he said 10 points that have helped him to avoid defeat in the market.

Investment Principal 1. Create a fixed income outside the market for your livelihood: Never be dependent on the income from the stock market because it is volatile. He is applying margin of safety logic even before entering the market. 

Investment Principal 2. Be informed and read a lot: The market rewards you as per your perception. If you think investing is a gamble, then it is a gamble. If you think it is a business, then it is a business. Read a lot and be a maniac when it comes to reading; it will help you connect the dots.  Warren Buffett once held up stacks of paper and said he read "500 pages like this every day. That's how knowledge builds up, like compound interest."

Investment Principal 3.  Invest a part of your savings, not the earnings, into stocks: So if you have decided to invest 25% of your savings in stocks, invest 12% to 15% as it is a risky business. Also you should only invest a certain amount based on your risk-taking capacity.

Investment Principal 4.  Don't trade and don't leverage: Trading is a 24-hour business. Don't invest from borrowed money. Don’t trade just because you see someone making money by trading.

Investment Principal 5. Invest only for five to 10 years; minimum time frame is five years: rome was not built in a day. It takes time for a story to mature. I always invest in small caps that go on to become mid to large caps. Whenever I bought a small cap, people discouraged me. No one liked the stock. For two years the company went nowhere; after that it gave multibagger returns.

Investment Principal 6. Invest only with the best management and let it worry about the company: If you invest with the best management, you don't have to worry. Management is playing golf, and we investors are worrying 24 hours about what will happen to the company. What is the use of being an investor? Let management worry because management has its prestige and its name at stake.
Good management in bad business is better than bad management in good business. 

Investment Principal 7. Your investment belongs to the market and the profits belong to you: As long as you are invested, the profits belong to the market. Don't spend just because the stock has risen because tomorrow stock prices can collapse.

Investment Principal 8. Book profits periodically: Invest profits in buying a house which is very important.

Investment Principal 9. Keep a balanced mind: Don't be happy in an up market, and don't be sad in a down market. Be physically, financially and mentally sound. He explains how one should avoid regret. He says a stock can go up after you sell it. Don't regret. The stock market is a place of regret. You make money, you regret. You lose money, you regret. You make less money, you regret. That is why it is very important to keep a balanced mind.

Investment Principal 10. Luck plays a crucial role. Do good karma: Be a good human being. The stock market is a mind game. If you are doing good karma, it will come back to you.

Top 20 tips by the all time investors

Howard Marks: Smart Investing doesn’t consist of buying Good Assets, but of buying Assets ‘Well’… This is a very, very important Distinction that very, very few people understand. “


Warren Buffett: “Investors should remember that Excitement and Expenses are their Enemies. And if they insist on trying to ‘Time’ their Participation in Equities, they should try to be ‘Fearful’ when others are Greedy and ‘Greedy’ only when others are Fearful.”


John Templeton: “For all long-term Investors, there is only One Objective – Maximum total Real Return after Taxes.”


Benjamin Graham: (Guru of Buffett) “It is absurd to think that the general public can ever Make Money out of ‘Market Forecasts’…”


George Soros: “If Investing is Entertaining, if you’re having Fun, you’re probably not Making any Money. Good Investing is ‘Boring’…”


Jack Bogle: “If you have trouble imaging a 20% Loss in the Stock Market, You Shouldn’t be in Stocks.”


Bob Farrell: “The Public buys the most at the Top and the least at the Bottom.” And, “When all the experts and forecasts agree – ‘Something Else’ is going to happen.”


Jeremy Grantham: “By far the biggest problem for professionals in Investing is dealing with Career and Business Risk: protecting your own job as an agent. The second curse of Professional Investing is Over-Management caused by the need to be seen to be busy, to be earning your keep. The individual is far better-positioned to wait patiently for the ‘Right Pitch’ while paying no regard to what ‘Others’ are Doing, which is almost impossible for Professionals.”


Barton Biggs: “Quantitatively based Solutions and Asset Allocation equations invariably fail as they are designed to capture what would have worked in the ‘Previous Cycle’ whereas the next one remains a ‘Riddle’ Wrapped in an Enigma.”


Philip Fisher: “The Stock Market is filled with individuals Who know the ‘Price’ of Everything, but the ‘Value’ of Nothing.”


Ken Fisher: “You can’t develop a Portfolio Strategy around endless possibilities. You wouldn’t even get out of bed if you considered everything that could possibly happen….. You can use ‘History’ as one tool for shaping reasonable Probabilities. Then, you look at the world of economic, sentiment and political drivers to determine what’s most likely to happen—While always knowing you can be and will be wrong a lot.”


Charles Ellis: “The average Long-term experience in investing is never surprising, but the Short-term experience is always Surprising. We now know to focus not on ‘Rate of Return’, but on the informed Management of Risk”…


Bill Miller: “The Market does reflect the available Information, as the professors tell us. But just as the funhouse Mirrors don’t always accurately reflect your weight, the Markets don’t always accurately ‘Reflect’ that Information. Usually they are too pessimistic when it’s Bad, and too Optimistic when it’s Good.”


Thomas Rowe Price Jr: “Every Business is Manmade. It is a result of individuals. It reflects the Personalities and the Business Philosophy of the founders and those who have directed its affairs throughout its existence. If you want to have an Understanding of any Business, it is important to know the ‘Background of the People’ who started it and directed its Past and the Hopes and Ambitions of those who are planning its Future.”


Carl Icahn: “We have bloated Bureaucracies in Corporate America. The root of the problem is the absence of Real Corporate Democracy.”


Peter Lynch: Investing Without ‘Research’ is like playing Stud Poker and never looking at the Cards.”


John Neff: “It’s not always easy to do what’s not popular, but that’s where you make your money. Buy Stocks that look bad to less careful investors and hang on until their Real Value is recognized.”


Henry Kravis: “If you don’t have Integrity, you have nothing. You can’t buy it. You can have all the Money in the world, but if you are not a Moral and Ethical Person, you really have nothing.”


Ray Dalio : “An Economy is simply the Sum of the Transactions that make it up. A transaction is a simple thing. Because there are a lot of them, the economy looks more complex than it really is. If instead of looking at it from the top down, we look at it from the transaction up, it is much easier to Understand.”


Jesse Livermore: ‘Play the Market’ only when all factors are in your favour. No person can play the market all the time and win. There are times when you should be completely Out Of the Market, for Emotional as well as Economic Reasons.

Corporate rules for happy life!!

Corporate rules for happy life: 

1. Trust nobody. 

2. What happens in office, remain in office. Never take office gossips to home and vice versa.

3. Enter office on time, leave on time. Your desktop is not helping improvement in your health.

4. Never make GF/BF and/or brother/sister in office. It will always backfire.

5. Expect nothing. If somebody helps, feel thankful. If not, you will learn to know things on your own.

6. Never rush for position. If you get promoted, congrats. If not, it doesn't matter. You will always be remembered for your knowledge and politeness, not for your designation.

7. Never run behind office stuff. You have better things to do in life.

8. Avoid taking everything on your ego. Your salary matters. You are being paid. Use your assets to get happiness.

9. It doesn't matter how people treat you. Be humble. You are not everyone's cup of tea.

10. In the end nothing matters except family, friends, home, and Inner peace.

Thoughts for Investment Inspiration

Some thoughts for investment inspiration  🙂 

1) Bonds are for storing wealth and equities are for creation of wealth.

2) In my opinion, the biggest asset one can have is zero debt.

3) The greatest discipline in personal finance is living below your means.

4) As Ben Carlson says, emotions cannot be back tested. That’s why past bear market always looks like opportunities and future ones scary.

5) Early financial independence and early retirement are completely different. To me, the former is a blessing and the latter is a curse.

6) Don’t think how it would have been if you’ve started 10 years ago. Start today and visualise how you would feel 10 years from now.

7) The neighbourhood we live determines our life style & spending. Need to be careful in choosing one which matches our goals and personality.

8) Paying minimum balance regularly on credit card is the maximum sign that you’re getting into debt trap.

9) Many are long term investors till next bear market.

10) Don’t take aggressive bets. Take measured risk. Remember one blunder can push you back by a decade or more in terms of wealth.

11) Big money can be made through high savings, wise investing and lots of patience.

12) One sign of progress in individual investor’s portfolio is no churn or very less churn.

13) Trying to get rich fast is a foolproof way to lose what we have.

14) Losing opportunities is far better than losing money. Don’t invest in fads.

15) “Making as much money as quickly as possible” is not an investment strategy. Unfortunately for most of us that is the strategy.

16) Aggressive strategy cannot be a substitute for high savings. Save high and take moderate risk than saving less and taking high risk.

17) The day we realise not losing is as important as winning; we would stop blindly chasing returns.

18) Good periods are more than bad periods. By not timing, though we go through bad periods, do not miss even a single good period.

19) We’ll stop looking for quick money the moment we consider stocks as businesses and realise that our wealth grows in line with business growth.

20) There are periods of high returns, low returns, no returns and negative returns. We need to go through all these to get long term returns.

21) Listening to market forecasts is not only useless but can be very harmful too; if you start acting on them.

22) The hard truth is only around 3% of our population are in a position to aspire for financial independence. Don’t waste this rare privilege.