Of course there’s no way to guarantee success in investing, or in any other aspect of life. Yet investing is mostly about making choices that try to predict what other people might do.
In these eight quotations from the world of investing, a few themes from behavioural economics and psychology emerge over and over.
Devil in the detail
While the detail of any investment or market situation can complicate things, there may also typically be clues to longer-term success in investor experience and exposure to the markets.
The Oracle of Omaha offered up this pithy bon mot in Panel at the Premiere, on DVDs of the 2008 film IOUSA. Buffett’s approach to investing is conservative – and successful.2
A real catch
Know your investing goal and stay focused, suggests oil and finance billionaire T Boone Pickens in a tweet: wait for a real opportunity to invest.3
It’s easy to follow the herd when investing. Don’t assume you can copy others, Kiyosaki’s bestseller advises.4
Time and tide
Klarman in Baupost’s 2013 letter to investors notes ‘buy’ opportunities may appear in unexpected places – perhaps as ‘the herd’ races for a nearby bandwagon.5
Sinquefield likens active investors to Communists during a 1995 Schwab debate, as they may both suffer from an illusion of control.6
Cry me a river
Keynes in The General Theory of Employment, Interest and Money warns against investing as a speculative gamble. Instead, focus on productive business activities, he writes.7
As Kahneman warns in Thinking, Fast and Slow, we tend to see patterns everywhere and overestimate control over events. Guard against this, he says.8
Expect the unexpected
Taleb explains in 2001 book Fooled by Randomness that failure is always possible, so first work out if you can take a loss.