An investor needs to do very few things right as long as he or she avoids big mistakes.
An investor should act as though he had a lifetime decision card with just 20 punches on it.
An investor should ordinarily hold a small piece of an outstanding business with the same tenacity that an owner would exhibit if he owned all of that business.
Anything can happen in stock markets and you ought to conduct your affairs so that if the most extraordinary events happen, that you’re still around to play the next day.
I’m not looking at quarterly earnings projections or next year’s earnings. I’m not thinking about what day of the week it is. I doesn’t care what investment research from any place say. I’m not interested in price momentum, volume or anything. I simply ask: What is the business worth?
Basically, when you get to my age, you’ll really measure your success in life by how many of the people you want to have love you actually do love you.
Investors should be skeptical of history-based models. Constructed by a nerdy-sounding priesthood using esoteric terms such as beta, gamma, sigma and the like, these models tend to look impressive. Too often, though, investors forget to examine the assumptions behind the models. Beware of geeks bearing formulas.
But a pin lies in wait for every bubble. And when the two eventually meet, a new wave of investors learn some very old lessons: First, many in Wall Street – a community in which quality control is not prized – will sell investors anything they will buy. Second, speculation is most dangerous when it looks easiest.
Buy a business, don’t rent stocks.
Buy a stock the way you would buy a house. Understand and like it such that you’d be content to own it in the absence of any market.