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What 7 Yogi Berra Quotes Teach Us About Investing

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What the late Yogi Berra can teach us about investing.

New York Yankees legend Yogi Berra died on Tuesday night at the age of 90 and will go down in history as one of the greatest catchers who ever played the game. He captured 10 World Series titles as a player, was a three-time AL MVP, and won pennants in both leagues as a manager too.

However, what many will also remember Berra for are his so-called 'Yogi-isms' which are short and often confusing words of wisdom or funny sayings that mash a few different ideas together. These include 'It's like déjà vu all over again', 'you can observe a lot by just watching' or 'Even Napoleon had his Watergate'.

But did you know that many of these sayings also have a lot to do with investing as well? Below, I've highlighted seven of my favorite yogi-isms that can actually be applied to the investing world too:

You better cut the pizza in four pieces because I'm not hungry enough to eat six

This mentality is a perfect example of why companies do stock splits. The idea that somehow the number of slices-or shares-somehow changes the total is a myth that we can all laugh at for pizza, but one that has been hard to shake for many beginner investors who believe that having more shares is somehow better even though it represents the same part of the pie.

We made too many wrong mistakes

While you can take this one a number of different ways, to me it means you are always going to make mistakes, the key is to limit the catastrophic ones. You can recover from the small mistakes, but big ones are hard to overcome. We see this all the time when a stock plunges 50%, as you now need a 100% return from here to make back your money. Limit these 'wrong' mistakes as much as possible! (also see all the stocks on the Zacks Rank #5 Strong Sell list )

You've got to be very careful if you don't know where you are going because you might not get there

Many times investors just pile money into a few popular growth stocks, headline companies, or low cost funds. But what is the purpose of this investing? Failing to have a plan and target for your money is a mistake that many investors make and an easy one to rectify as well. Always remember what your goals are for the money you are investing and make sure your current picks align with those needs.

The future ain't what it used to be

Expectations for the future are always pretty rosy in the investing world, but they seemingly always get ratcheted down as the future becomes now. Take for example earnings expectations for the Q3 season. In late June they were projecting earnings to decline by 2.7% while today they are expecting lower earnings by about 5.6%. So take today's predictions of the future with a grain of salt as they are very likely to change as more information comes into the picture (see Q3 Expectations Continue to Fall ).

You don't have to swing hard to hit a home run. If you got the timing, it'll go

Baseball, like investing, is all about timing. Consider that if you bought the S&P 500 ( SPY ) in March of 2009 you would be up over 180% today, but if you had bought just six months earlier you would be up just 86% in comparison. Sometimes swinging at the right time is more important than how hard you hit the ball.

A nickel ain't worth a dime anymore

This quote is all about inflation and it is often an area that investors ignore, largely because inflation is so moderate right now at about 2% a year. However, back in the 70s and 80s, inflation was running at about 10% in a year in many cases which made those dimes have the buying power of nickels in roughly seven years' time. So while inflation is low now, it is definitely something long-term investors need to keep in mind.

If you can't imitate him, don't copy him

Many times investors try to copy famous investors like Carl Icahn and his Icahn Enterprises ( IEP ) or Warren Buffett and his picks at Berkshire Hathaway ( BRK.B ). But we fail to remember that many times these gurus get sweetheart deals that the average person cannot replicate. Take for example Buffett's fire-sale deal to buy shares of Goldman Sachs ( GS ) back in the financial crisis in which he got preferred stock and also warrants to buy shares at $115/share. Buffett later cashed out of both for a huge profit which is something that no 'regular' investor would have been able to do.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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