Investing quotes are popular for a reason – they allow you to learn the essential lessons from the greatest investors of all time in just a few short sentences.
In this post, I’m going to go over some of my favorite investing quotes. Whether you’re a new or experienced investor, you’ll find value from the sages below.
Also, I’ve included the quote images in a high-resolution format. If interested, just right click on them and save them to your computer. I’ve configured my desktop to rotate through these quotes and others daily. Enjoy!
- Warren Buffett
- Charlie Munger
- Peter Lynch
- Benjamin Graham
- Sir John Templeton
- John Maynard Keynes
- John “Jack” Bogle
- Seth Klarman
- Albert Einstein
Beyond being one history’s most successful investors, a businessman, and a philanthropist, Warren Buffett is also a fantastic source of amusing yet insightful one-liners. We’ll start with some of his best and what they can teach us about investing.
“I will tell you how to become rich. Be fearful when others are greedy and be greedy when others are fearful. – Warren Buffett”
I have this quote framed on my wall. It reminds me of how I should be investing when fear and greed are at its strongest. Being a contrarian at extremes has worked out for me both in investing and trading. There’s lots of academic evidence supporting this quote, also. Whether it’s clearing the order books for a short-term trading bounce, or timing the market with volatility extremes, being a contrarian is profitable.
Someone’s sitting in the shade today because someone planted a tree a long time ago. – Warren Buffett”
Reaping the fruits of your labor takes time. If you want your future self, future loved one, or even future generations to prosper, you need to do the work now to set them up for success (plant the tree). No matter what investing strategy you use, you can’t afford to lose sight of the big picture. Many investors miss the forest through the trees – keep your mind on the big picture and let your investments grow.
“We don’t have to be smarter than the rest. We have to be more disciplined than the rest. – Warren Buffett”
There are two ways of looking at this quote, both of which prove insightful. The first is that when it comes to investing, discipline is often more powerful than intelligence. It is not a brilliant, get-rich-quick scheme that pays off; it is the slow and steady growth of assets that leads to wealth.
The second way to read this quote is to warn against trying to prove yourself through being “smarter than the rest”. In a complex, fast-paced, high-stakes environment like finance, there are always people looking to prove themselves. You don’t want to be one of these people. To succeed, you have to stop wasting time trying to compete with others and instead find a steady path you can stick with.
Howard Buffett, Warren’s eldest son, said that his father was the second smartest man he knows. Howard said that Charlie Munger, Warren’s second at Berkshire Hathaway, was the first. This means a lot, and while Charlie isn’t as charismatic as Warren, when Charlie speaks, it packs a punch. Here are a few of his most famous quotes.
“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price. – Charlie Munger”
Everyone loves a good deal, but a good price doesn’t always mean good value. This is one of the biggest influences that Charlie had on Warren. Charlie helped Warren get over the initial purchase price of See’s Candies, and it has returned more than 8,000% since 1972, or roughly 160% per year. Warren said in his 2007 letter that “The seller was asking for $30 million, and I was adamant about not going above $25 million. Fortunately, I caved; Otherwise, I would have balked, and [$2] billion would have gone to somebody else.”
This purchase led to a turning point in Warren Buffett’s investing style to valuing high-quality compounders and not just Benjamin Graham-style cheap assets.
“People calculate too much and think too little. – Charlie Munger”
It’s so easy to get mired in models and not see the big picture. When it comes to investing, common sense is king. It’s why simple minimum variance portfolios often outperform more complicated models and why Mohnish Pabrai doesn’t use Excel. Keep it understandable, logical and simple – don’t be the next Long-Term Capital Management.
Peter Lynch is a former manager of the Magellan Fund and is one of history’s best-known investors. You could even argue that Lynch, not Buffet, is the greatest investor of all time.
“I think you have to learn that there’s a company behind every stock, and that there’s only one reason why stocks go up. Companies go from doing poorly to doing well, or small companies grow to large companies.”
Peter Lynch was well-known for vocalizing his belief that investors must always understand the investments they hold. This quote is one example of his straightforward approach to investing.
The media loves to create elaborate reasons why stock prices fluctuate, and while short-term fluctuations may have their reasons, over time, there is one reason why stock prices go up – companies growing and improving.
“Go for a business that any idiot can run – because sooner or later any idiot probably is going to be running it.”
It’s so critical to understand the underlying economics of the business. Great businesses get to make a lot of easy choices where weak companies have to make frequent, difficult decisions. When a management with a reputation for brilliance tackles a business with a reputation for bad economics, its the reputation fo the business that remains intact.
Perhaps I’ve been reading too many quotes, but the above is paraphrased from Warren and Charlie. Long story short, buy great businesses at a fair price – less can go wrong, and the upside is typically higher: Think See’s Candies.
Benjamin Graham is often referred to as “the father of value investing.” Warren Buffet has called Graham’s book, The Intelligent Investor, “by far the best book on investing ever written.” Though the book was first published in 1949, it is still considered one of the books every investor should read.
“To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks. – Benjamin Graham”
The average annual return of the S&P over the last 90 years has been almost ten percent. This means that if you invested $25,000 and were a completely average investor (with returns matching the historical annual return of the S&P), without investing any more money, after 30 years you would have $413,057.
Therefore, an “average” investor who does no better or no worse than the market can increase his money by 16-fold, if given enough time. Simply matching the returns of the market can provide satisfactory investment results, but achieving superior results is where things become much more difficult.
And in this case, average isn’t so average. Most active investors underperform passive investment strategies.
“In the short term, the market is a voting machine, but in the long run, it is a weighting machine.”
Here, Graham eloquently and succinctly reminds us that in the short-term, companies may rise and fall based on opinions, in the long-term, companies grow and shrink based on fundamentals.
“Buy not on optimism, but arithmetic.”
Though only six words, there’s a lot of good advice here. First, don’t get caught up in unrealistic bull markets. Secondly, don’t let your own emotions cloud your investment decisions. Finally, base your investment decisions on the numbers. While there is always a business and market narrative to understand, you must connect that narrative to numbers.
Sir John Templeton
Sir John Templeton was a mutual fund manager who became one of the most successful investors of the 20th century. Templeton founded the Templeton Growth Fund and is best known as an international value investor. In 1999, Money magazine called him “arguably the greatest global stock picker of the century.”
“The four most dangerous words in investing are; ‘this time it’s different. – Sir John Templeton”
You can bet a bubble is about to burst when media personalities begin pointing towards data proving that there is not, in fact, a bubble. They claim it may look like a bubble, but they always have a logical sounding reason for why this time it’s different. The reality is that history repeats itself. The longer we try to delude ourselves into thinking otherwise, the worse the position we put ourselves in. Valuation matters – don’t get caught confusing clicks for cash flows.
“Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. – Sir John Templeton”
“The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell. – Sir John Templeton”
These are two quotes that work well together.
A bull market begins when a bear market comes to an end. Why? During a bear market, valuations are depressed and there’s a disproportionate amount of investable cash sitting on the sidelines. In other words, every seller has sold.
As the bull market continues, spirits begin to rise, and that investable cash gets put to work, but it can’t last forever. When stocks have soared, and everyone who can buy already has, I’m sure you can guess what happens next. This behavior of individual investors leads them to consistently underperform their benchmarks.
John Maynard Keynes
Next up, we have a couple of great lines from the British economic theorist John Maynard Keynes, for whom Keynesian economics is named. Though Keynes passed away almost seventy-five years ago, his words remain as true today as while he was living.
“There is no harm in being sometimes wrong - especially if one is promptly found out. – John Maynard Keynes”
At some point in your investing career, you will be wrong. While you don’t want to be wrong consistently, being wrong sometimes won’t harm you. BUT when you are wrong, accept it and make the proper corrections. More often than not, far more harm comes from refusing to recognize and fix an error promptly than from the mistake itself.
“Successful investing is anticipating the anticipations of others. – John Maynard Keynes”
As with any particular profession, it is often easy to lose sight of the big picture. The language of investing often helps hide it even further. We talk about stocks rising or falling as if of their own accord, but we must always remember that other investors cause these movements.
John “Jack” Bogle
John Bogle, commonly known as Jack Bogle, founded the Vanguard Group and was a major force behind making index investing the popular option it is today. And while Bogle didn’t run a fund, he undersood the needs of passive index funds and argubly added more to the pockets of individual investors than anyone else in history.
“If you have trouble imagining a 20% loss in the stock market, you shouldn’t be in stocks. – John “Jack” Bogle”
Investing in stocks comes with volatility and risk. No matter how good you are at picking stocks, the value of your investment will rise and fall. This quote from Bogle reminds us that these drops will happen, and to be a good investor, you must be prepared for them.
“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 ebullience and the depth of despair alike that this too shall pass. – John “Jack” Bogle”
We’ve seen other investing quotes about the highs and lows of the market, but what is particularly noteworthy about this quote is that it highlights the importance of the balance between guts and steadiness. You need both the right kind of character, one that is willing to take risks. Still, you must also have the ability to remove yourself emotionally and remember that both the highs and lows of the market are temporary.
Seth Klarman is a billionaire investor, hedge fund manager, and writer. Klarman runs one of the world’s largest hedge funds, Baupost Group, which manages $27 billion. Klarman is considered the “Oracle of Boston” and has become a billionaire thanks to following in the footsteps of Graham and Buffett.
“Investing is the intersection of economics and psychology. – Seth Klarman”
Those who focus only on economics often fail to succeed because they fail to account for the psychological elements in play. Those who focus only on the psychology of the markets also often fail to succeed because they fail to account for the equation’s economic factors. Successful investing requires always keeping both in mind.
“Interestingly, we have beaten the market quite handsomely over this time frame, although beating the market has never been our objective. Rather, we have consistently tried not to lose money and, in doing so, have not only protected on the downside but also outperformed on the upside. – Seth Klarman”
Good investors focus on returns, great investors focus on risk. The most important thing is to stay in the game. If you take care of the downside, the upside will take care of itself.
German physicist and winner of the Nobel Prize for physics, Albert Einstein, may not be known for his investing, but as one of history’s most well-known geniuses, he’s worth learning from and has an incredibly powerful investing quote attributed to him.
“Compound interest is the eighth wonder of the world. He who understands it earns it… he who doesn’t… pays it. – Albert Einstein”
Compound interest is about the most powerful and valuable variable in investing that we can control – time. Young people often assume that investing is for a later in life, but the younger you are, the more time you have. The sooner you can begin investing, even if the sum is small, the better. Compound interest is often underappreciated - but not by Albert Einstein.
Do you have a favorite investing quote? If so, let me know in the comments below and if enough agree, I’ll create a desktop background image for it and add it to this post!
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