I've always been a big fan of quotes and working at Cabot has
given me some new (investing-themed) favorites. One, which is
inscribed on our office mantel, says "Markets are never wrong;
opinions are." This bit of market wisdom comes from Jesse L.
Livermore, a trader famous for making and losing several
million-dollar fortunes in his lifetime and whose life Edwin
Lefevre wrote about in the investing must-read
Reminiscences of a Stock Operator
Today, I'm going to share some quotes from the world's most
famous investors. I hope they help you become a better investor
and keep in mind the important lessons the market teaches us,
especially in more volatile times like we just experienced.
"When reward is at its pinnacle, risk is near at hand."-John
(Jack) Bogle, founder of the Vanguard Group.
"Look at market fluctuations as your friend rather than your
enemy. Profit from folly rather than participate in it. "-Warren
Buffett, the Oracle of Omaha and the third richest man in the
"Psychology is probably the most important factor in the
market-and one that is least understood. "-David Dreman, a
contrarian investor and author.
"I don't want a lot of good investments; I want a few outstanding
ones. "-Philip A. Fisher, growth investor and author of
Common Stocks and Uncommon Profits
"Even the intelligent investor is likely to need considerable
willpower to keep from following the crowd. "-Benjamin Graham,
the Father of Value Investing and author of
The Intelligent Investor
"If you stay half-alert, you can pick the spectacular performers
right from your place of business or out of the neighborhood
shopping mall, and long before Wall Street discovers them.
"-Peter Lynch, managed Fidelity Magellan Fund from 1977 to 1990,
beating the S&P 500 Index in 11 of those 13 years, achieving
an annual return of 29%.
"Successful stocks don't tell you when to sell. When you feel
like bragging, it's probably time to sell. "-John Neff, averaged
annual total return of 13.7% (versus S&P 500's 10.6%) while
managing Vanguard's Windsor Fund from 1964 to 1995.
"Since the market tends to go in the opposite direction of what
the majority of people think, I would say 95% of all these people
you hear on TV shows are giving you their personal opinion. And
personal opinions are almost always worthless ... facts and
markets are far more reliable. "-William J. O'Neil, growth stock
investor, CANSLIM author and founder of Investor's Business
"Change is the investor's only certainty. "-Thomas Rowe Price
Jr., growth stock investor and founder of T. Rowe Price
"Most cannot spare the time and money to research smaller stocks.
You are therefore more likely to find a bargain in this
relatively underexploited area of the stock market, "-Julian
Robertson, had the best hedge fund record during the 1980s and
1990s, with a compound rate of return of 32%.
"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 money you lose
when you're wrong. "-George Soros, ran the Quantum Fund, which
generated an average annual return of more than 30%.
"Invest at the point of maximum pessimism. "-John Templeton, of
the Templeton investment funds. In 1939, he famously bought $100
of every stock trading below $1 on the New York and American
stock exchanges, totaling 104 stocks, of which 34 went bankrupt.
He invested a total of $10,400 and sold four years later for more
"My only sound reason for buying a stock is that it is rising in
price. If that is happening, no other reason is required. If that
is not happening, no other reason is worth considering."-Nicholas
Darvas, author of
How I Made $2,000,000 in the Stock Market
"Remember, the market is designed to fool most of the people most
of the time. "-Jesse Livermore
If you didn't see your favorite bit of investing wisdom here,
please reply to this email to send it in. I'd love to add it to
my own collection and share it with your fellow Cabot Wealth
Advisory readers in a future issue.
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In this week's Stock Market Analysis Video, Cabot China &
Emerging Markets Report editor Paul Goodwin discusses the good
week in the stock market and the positive action in Cabot's
market timing indicators. Paul also discusses loss limits and the
ruling reason-a one-sentence explanation of why you want to buy a
certain stock. Stocks discussed:
Whole Foods (WFMI), Shutterfly (
), Sina Corp. (
Click here to watch the video.
Until next time,
Editor of Cabot Wealth Advisory