Monday, January 31, 2011

Warren Buffett: Why I Want To Make Lots Of Money

"It's not that I want money.  It's the fun of making money and watching it grow."

Warren Buffet, age 13

John Bogle: Investing Success Depends On Character And Guts

“Your success in investing will depend in part on your character and guts, and in part on your ability to realize at the height of the ebullience and the depth of despair alike that this too shall pass.”

John Bogle

Charlie Munger On The Huge Influx Of Finance Majors

"A big percentage of Cal-Tech grads are going into finance. I regard this as a regretfully bad outcome. They'll make a lot of money by clobbering customers who aren't as smart as them. It's a mistake. I look at this in terms of losses from the diversion of our best talent going into some money-grubbing exercise."

Charlie Munger

Peter Lynch On Market Timing

“Nobody can predict interest rates, the future direction of the economy or the stock market. Dismiss all such forecasts and concentrate on what is actually happening to the companies in which you’ve invested.”

Peter Lynch

Marc Faber: You Can't Spend Yourself Out Of Misery

"I think what should happen in the U.S. is for the president to tell the U.S., you have to tighten your belts.

We have to go through hard times for five years to repair the damage that was committed over 20-25 years by the Federal Reserve, by the Treasury, by the politicians, and somebody has to tell the truth. But the politicians keep on fueling the illusion that you can spend yourself out of the misery, and that by printing money you will improve the economy, which is not the case."

Marc Faber

But it does appear the economy has been improving.

Benjamin Graham On How To Lose Money

“The chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions.”

Benjamin Graham

Warren Buffett On How To Buy Stocks

“If you expect to continue to purchase stocks throughout your life, you should welcome price declines as a way to add stocks more cheaply to your portfolio.”

Warren Buffett

Jim Rogers On When To Sell The Euro And Dollar

"If everybody gets widely enthusiastic and thinks the euro's OK now or the dollar's OK now, then I would probably be forced to sell. Things are happening with the dollar that could make it more attractive. I mean they are talking about giving tax incentives for people to bring their dollar holdings back home that can make the dollar go a lot higher for a while. Things could happen, and we'll just have to wait and see how it works out."

Jim Rogers

John Kenneth Galbraith On Economic Forecasting

"The function of economic forecasting is to make astrology look respectable."

John Kenneth Galbraith

Shelby Davis: You Make Most Of Your Money In A Bear Market

"You make most of your money in a bear market, you just don't realize it at the time."

Shelby C. Davis

Christopher Davis: Long-Term Investors Always Win

"Despite inevitable periods of uncertainty, stocks have rewarded patient, long-term investors."

Christopher C. Davis

Sunday, January 30, 2011

Jim Rogers: Commodities Go Higher No Matter Which Way The Dollar Goes

"It won't matter if the dollar goes up, if the dollar goes down, it doesn't matter. I mean they're denominated in dollars, but if the dollar goes down, say, something's got to go up against it, and one of the things that will go up will be commodities.

"Plus, there's shortages developing in commodities. I don't know if you've tried to buy any tin recently or any rubber recently or any cotton even. Shortages are developing everywhere no matter what currency the commodity is denominated in."

Jim Rogers


Benjamin Graham: Master Your Emotions

"Individuals who cannot master their emotions are ill-suited to profit from the investment process."

Benjamin Graham

Shelby Davis: We Will Get Over Our Crisis

"History provides a crucial insight regarding market crises:  They are inevitable, painful and ultimately surmountable."

Shelby M.C. Davis

Peter Lynch: Why Preparing For Market Corrections Is Bad

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

Peter Lynch

Paul Tudor Jones: The Secret To Successful Trading

"The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge. Because I think there are certain situations where you can absolutely understand what motivates every buyer and seller and have a pretty good picture of what's going to happen. And it just requires an enormous amount of grunt work and dedication to finding all possible bits of information.

You pick an instrument and there's whole variety of benchmarks, things that you look at when trading a particular instrument whether it's a stock or a commodity or a bond. There's a fundamental information set that you acquire with regard to each particular asset class and then you overlay a whole host of technical indicators and that's how you make a decision. It doesn't make any difference whether it's pork bellies or Yahoo. At the end of the day, it's all the same. You need to understand what factors you need to have at your disposal to develop a core competency to make a legitimate investment decision in that particular asset class. And then at the end of the day, the most important thing is how good are you at risk control. 90% of any great trader is going to be the risk control."

Paul Tudor Jones

Ken Fisher: Good News For 2011

"As 2011 begins a little perspective is in order. The global economy has been accelerating over the last six months-- just as most expected it to slow or sink into a double-dip recession. Sentiment remains skeptical at best, and the signs of progress are still being ignored. Pretty much everyone is still fretting over an anemic recovery."

Ken Fisher

Jim Rogers: Europe And U.S. Are Bankrupted

"The U.S. is the largest debtor nation in the history of the world, but some individual European countries are in gigantic trouble.

Greece, Greece is terrible. The U.K. is terrible. They have serious, serious problems. Ireland is in serious trouble, which is worse? The U.S. can print money and therefore it can conceivably put off its problems further than anyone else. But at the same time, it looks like the European Central Bank is going to continue to bail out some of the European countries that are in serious trouble.

They're all bankrupt. The U.S. is bankrupt. Greece is bankrupt. We're sitting around deluding ourselves. The U.K. is bankrupt. If you look at the numbers there's no way the U.S. can ever pay off its debt. I haven't done enough homework to know, but there are friends of mine who've said the U.S. cannot pay its debt. Within five years, the U.S. will be defaulting on its bonds. I have not done that homework myself."

Jim Rogers

Jim Rogers: My Secret To Getting Rich

"Take your money, put it in Treasury bills or a money-market fund. Just sit back, go to the beach, go to the movies, play checkers, do whatever you want to.

Then something will come along where you know it's right. Take all your money out of the money-market fund, put it in whatever it happens to be and stay with it for three or four or five or 10 years, whatever it is.

You'll know when to sell again, because you'll know more about it than anybody else. Take your money out, put it back in the money-market fund, and wait for the next thing to come along. When it does, you'll make a whole lot of money."

Jim Rogers

James Simons Discusses Math For America

David Einhorn: How I Pick My Stocks

"It could from newspapers but more often it’s stories. It’s other people discussing their investment thesis or um, observing kinda what’s going on, and then just thinking about things. A lot of the stories we hear, we start with, started with somebody else’s idea."

David Einhorn

Saturday, January 29, 2011

Jim Rogers: China Is Growing Much Faster Than India

"I know that China is booming. I know that every time I go to China, and I've been going to China for 26 years -- the first time I went it was 1984 -- and I assure you China is growing very rapidly and doing a lot of things right. Whether it's 8% or 12%, I mean you look at the Indians. Who can believe the Indian number; certainly not me.

I've been going to India for many years, too, and I know they're not growing as fast as China, but they claim to be. The Indians wait for the Chinese to announce their growth numbers and then they announce theirs. They want to make sure they are in the same league. But all of these numbers are made up; you must understand that by now."

Jim Rogers

Paul Tudor Jones: I Don't Like To Take A Lot Of Risk

"I think I am the single most conservative investor on earth in the sense that I absolutely hate losing money. My grandfather told me at a very early age that you are only worth what you can write a check for tomorrow, so the concept of having my net worth tied up in a stock a la Bill Gates, though God almighty it would be a great problem to have, it would be something that's just anathema to me and that's one reason that I've always liked the futures market so much, because you can generally get liquid and be in cash in literally the space of a few minutes. So that always appealed to me because I could always be liquid very quickly if I wanted to.

I'd say that my investment philosophy is that I don't take a lot of risk, I look for opportunities with tremendously skewed reward-risk opportunities. Don't ever let them get into your pocket - that means there's no reason to leverage substantially. There's no reason to take substantial amounts of financial risk ever, because you should always be able to find something where you can skew the reward risk relationship so greatly in your favor that you can take a variety of small investments with great reward risk opportunities that should give you minimum drawdown pain and maximum upside opportunities." 

Paul Tudor Jones

John Paulson Is A Buyer Of Stocks

"The equity risk premium in the market is the highest it has been in over 50 years, indicating to us that equities are due to rise as the current economic environment is by no means the most challenging it has been in 50 years."

John Paulson

John Maynard Keynes: Overdiversification Is Risky

"To carry ones eggs in a great number of baskets without having time or opportunity to discover how many have holes in the bottom is the surest way of increasing risk and loss."

John Maynard Keynes

Warren Buffett On Where To Look For Great Investment Opportunities

"A great investment opportunity occurs when a marvelous business encounters a one-time huge problem."

Warren Buffett

Warren Buffett On Long Term Investing

"One of my quirks is that I like to keep things.  The best stock to buy is one you are never going to sell.  Selling is like dumping your wife when she gets old.  With all the money I have, I don't want to live my life to get the last one-tenth of one percent."

Warren Buffett

Warren Buffett On Dressing For Success

"One of the things that attracted me to working with securities was the fact that you could live your own life.  You don't have to dress for success."

Warren Buffett

Friday, January 28, 2011

Chart Of The Week - SPX: Houston, We May Have A Problem

Bulls need to work their magic on Monday.  Pronto.

However, the bulls did defend support on Friday:

Jim Rogers On Oil, Gold, And Obama

Philip Fisher: Shocked By Short Term Traders

"I remember my sense of shock some half-dozen years ago when I read a stock recommendation to sell shares of a company. The recommendation was not based on any long-term fundamentals. Rather, it was that over the next six months the funds could be employed more profitably elsewhere."

Philip Fisher

Victor Sperandeo: The Key To Trading Success Is Emotional Discipline

"The key to trading success is emotional discipline. Making money has nothing to do with intelligence. To be a successful trader, you have to be able to admit mistakes. People who are very bright don’t make very many mistakes.

Besides trading, there is probably no other profession where you have to admit when you’re wrong. In trading, you can’t hide your failures."

Victor Sperandeo

James Simons: The Past Is A Good Predictor Of The Future

"Everything’s tested in historical markets. The past is a pretty good predictor of the future. It’s not perfect. But human beings drive markets, and human beings don’t change their stripes overnight. So to the extent that one can understand the past, there’s a good likelihood you’ll have some insight into the future."

James Simons

Ray Dalio: Be Wary Of Data Mining

"I learned to be especially wary about data mining – to not go looking for what would have worked in the past, which will lead me to have an incorrect perspective. Having a sound fundamental basis for making a trade, and an excellent perspective concerning what to expect from that trade, are the building blocks that have to be combined into a strategy."

Ray Dalio

Thursday, January 27, 2011

Jim Rogers: Make A Fortune In Commodities

“If the world economy gets better, commodities are going to make a fortune. If the world economy does not get better, commodities are the place to be because they are going to print more money, and that's how you protect yourself."

Jim Rogers

Victor Sperandeo: We're Going To Have HyperInflation

Former George Soros trader, Victor Sperandeo, discusses hyperinflation.

Chart Of The Week - CY

CY currently trades at 21.99 .

Steven Cohen: Technical Analysis Works

"The old guard wasn’t crazy about me, I used to hear it all the time. Most of the old-school had no belief in anything that wasn’t based on fundamental analysis. We were trading more than investing, and people frowned on it, they looked at it and didn’t want to partake. Finally, they said,‘Shoot. He’s making money.’ And they started copying me."

Steven Cohen

Jim Rogers: Inflation Doesn't Mean Stocks Go Higher

“Throughout history, go back and look, you know we had huge inflation in the 70s, stocks were not in a good place to be. This is the time when you should own real assets, not stocks and bonds.”

Jim Rogers

Marty Schwartz: Admit It When You're Wrong

"Traders would rather lose money than admit they’re wrong. I became a winning trader when I was able to say, “To hell with my ego, making money is more important.”

Marty Schwartz

Wednesday, January 26, 2011

Warren Buffett: Don't Bet Against America

"There is nothing dumber than betting against America. It hasn't worked since 1776."

Warren Buffett

Jim Rogers: Inflation Is Everywhere

"Inflation is here all over the world now, except at the BLS.  Only Americans and British are lying about this."

Jim Roger

Mark Cook: Those Seeking Shortcuts Are Doomed To Fail

"To succeed as a trader, one needs complete commitment. Those seeking shortcuts are doomed to failure. And even if you do everything right, you should still expect to, lose money during the first five years. These are cold, hard facts that many would-be traders prefer not to hear or believe, but ignoring them doesn’t change the reality."

Mark D. Cook

Marc Faber On Money Printing

"If you print money, and you have huge fiscal deficits, it would be horrible if the data isn’t any better than it is. So we have a crack-up boom. The question is, how sustainable is it and how healthy is it? It’s all money printing and fiscal deficits. One day the burden of these deficits will have to be paid by someone.  The economy is like a drug addict and you are not going to solve this by injecting more drugs."

Marc Faber

Warren Buffett: Do It First

"What the wise do in the beginning, fools do in the end."

Warren Buffett

David Tepper: It's Time To Be Bullish On Equities

"The economy is better now, there's no doubt about that.  The economic prospects are not fully reflected in the markets.  The PE for the S&P is relatively low.

The prospects look good for semiconductors (like Micron).  Gold is tough right now."

David Tepper

Jesse Livermore On Charting Basics

"If a stock doesn't act right don't touch it; because, being unable to tell precisely what is wrong, you cannot tell which way it is going. No diagnosis, no prognosis. No prognosis, no profit."

Jesse Livermore

Jim Rogers: Buying Rice On All Dips

"If rice goes down, I will buy more rice. Rice has a great future for the next few years."

Jim Rogers

William Eckhardt On What Feels Good

"What feels good is often the wrong thing to do."

William Eckhardt

Tuesday, January 25, 2011

Marc Faber Now Buying Treasuries

"Bernanke should resign.  I'm now buying Treasuries."

Marc Faber

Marc Faber: The Economy And Politicians Are Bullshit

"I think he's done a horrible job and I think that will continue, I think he is a dishonest person, and nothing has changed. Some politicians are more honest than others.  I don't think that I have a very high regard for politicians, I have a high regard for businessmen and for people who work, and not for people who abuse the system continuously.

And in comparison to other politicians, I think he came in on a platform as a president that would want to change the government in Washington, and actually he's made it worse.  We foreigners, we just laugh at someone like Mr. Obama.  I was very critical of Mr. Bush, but at least he had one line and he stuck to that line, and at least he set out to do a thing and he was relatively straight on the thing that he did.  He may have been wrong, but at least he didn't change his mind continuously, and didn't prostitute himself."

Marc Faber

Albert Einstein On Solving Problems

"We can't solve problems by using the same kind of thinking we used when we created them."

Albert Einstein