They Bet Big When They Have The Odds

The wise ones (investors) bet heavily when the world offers them that opportunity. They bet big when they have the odds. And the rest of the time, they don't. It's just that simple.

Warren Buffett

Sound Investing Can Make You Very Wealthy

Graham wasn't about brilliant investments and he wasn't about fads or fashion. He was about sound investing, and I think sound investing can make you very wealthy if you're not in too big of a hurry, and it never makes you poor, which is better.

Warren Buffett

The Market Does Not Forgive

The market, like the Lord, helps those who help themselves. But unlike the Lord, the market does not forgive those who know not what they do.

Warren Buffett

Think About Winning Rather Than Being A Hero

Being right is more important than being a genius. I think one reason why so many people try to pick tops and bottoms is that they want to prove to the world how smart they are. Think about winning rather than being a hero. Forget trying to judge trading success by how close you can come to picking major tops and bottoms, but rather by how well you can pick individual trades with merit based on favourable risk/return situations and a good percentage of winners. Go for consistency on a trade-to-trade basis, not perfect trades.

Jack Schwager

Understand That You May Be Wrong

It's important in life and in investing always to question yourself. Understand that you may be wrong, especially when you believe too firmly that you're right.

George Soros

Rationality Is Essential In Investing

You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beats the guy with a 130 IQ. Rationality is essential.

Warren Buffett

Dangers Of Projecting Extremely High Growth Rates

It gets very dangerous to project high growth and projecting extremely high growth rates for very long times has lost a lot of investors a lot of money.

Warren Buffett

Best One At Fair Price

I guess I had too much inclination originally to buy mediocre, or worse than mediocre, businesses at a very cheap price. That works OK, in the sense that you never lose money; but you never end up with a great business that way either. So that emphasis has shifted over the years. We don't want to buy the worst furniture store in town at the cheapest price; we want to buy the best one at a fair price.

Warren Buffett

Stocks Don't Give A Damn

A stock doesn't know who owns it. You may have all of those feelings and emotions as the stock goes up or down, but the stock doesn't give a damn.

Warren Buffett

Good Stocks Bought At The Wrong Price Can Go Down As Much As Bad Stocks

It's also risky and possibly foolish to say to yourself, "I'm not worried about my stocks being down because they are good stocks, and I'm still getting my dividends." Good stocks bought at the wrong price can go down as much as poor stocks, and it's possible they might not be such good stocks in the first place. It may just be your personal opinion that they're good.

William O'Neil

Keeping A Stock Too Long

An awful lot of people keep a stock too long because it gives them the warm fuzzies, particularly when a contrarian stance has been vindicated. If they sell it they lose bragging rights.

John Neff

Buffett On Making Mistakes

There is no shame in making a mistake. Despite a great deal of research and analysis, I make plenty of them, and so does every other investor, because the future is inherently unpredictable. But there is shame in refusing to acknowledge a mistake and rectifying it.

Warren Buffett

Be Patient

My weakness has always been being a bit premature on entering positions. I've learned to think to myself, "Patience, patience, patience." I try to wait until things set up just right before I take a trade. Then, when I am ready to take the trade, I slowly count to ten before I pick up the phone. It's better to have the wrong idea and good timing than the right idea and bad timing.

Linda Bradford Raschke

Don't Have To Make Money Back The Same Way You Lost It

You don't have to make money back the same way you lost it.

Warren Buffett

Not A Sin To Miss Opportunity Outside Area Of Competence

It's no sin to miss a great opportunity outside one's area of competence.

Warren Buffett

Well Founded Convictions

When you are confused, it is best to do nothing. You are just going for a random walk and that is when you are liable to get mugged, because you don’t have staying power. You are likely to be faked out by some stray fluctuations because you lack the courage of your convictions. As my friend, Victor Niederhoffer says, the market destroys the weak – that is, investors who don’t have well founded convictions. You need some convictions to avoid getting faked out, but having the courage of your convictions could get you wiped out if your convictions are false. So, I prefer to take a stand only when I have well-founded convictions.

George Soros

Absolutely Necessary To Have An Edge

To succeed as a trader, it is absolutely necessary to have an edge. You can't win without an edge, even with the world's greatest discipline and money management skills. If you don't have an edge, all that money management and discipline will do for you is to guarantee that you will gradually bleed to death. Incidentally, if you don't know what your edge is, you don't have one.

Jack Schwager

Worse Than Random

The majority of people trade worse than a purely random trader would.

William Eckhardt

Systems Trading Is Ultimately Discretionary

Systems trading is ultimately discretionary. The manager still has to decide how much risk to accept, which markets to play, and how aggressively to increase and decrease the trading base as a function of equity change. These decisions are quite important – often more important than trade timing.

Ed Seykota

Bitten In The Rear. Ouch!

The biggest things that keep a trader from meeting their plans are: getting sloppy a few times, forgetting to place a stop, or getting stubborn on one trade. These are the things I see. One mistake waiting to bite you in the rear.

Linda Bradford Rashke

Learn From Your Mistakes

The single most important advice I can give anybody is : Learn from your mistakes. That is the only way to become a successful trader.

David Ryan

Enthusiasm Leads To Disaster

While enthusiasm may be necessary for great accomplishment elsewhere, in Wall Street, it almost invariably leads to disaster.

Benjamin Graham

Self Examination

You can't control what the market does, but you can control your reaction to the market. I examine what I do all the time. That's what trading is all about.

Steve Cohen

Ceasing To Be Wrong

I was wrong; and the only thing to do when a man is wrong is to be right by ceasing to be wrong.

Jesse Livermore