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Investing Wisdom from the Greats

Today, I’m going to share some quotes from the world’s most famous investors. Please write in to share your favorite if it doesn’t appear on this list; I might print it in a future column.

Investing Wisdom from the Greats

Stock Market Analysis Video

In Case You Missed It


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As you read this, I’m somewhere in Tennessee, on a trek from Nashville to the Great Smoky Mountains National Park. In light of that, I’m going to keep this short and sweet.

I’ve always been a big fan of quotes and working at Cabot has given me some new (investing-themed) favorites. One, which is inscribed on our office mantel, says “Markets are never wrong; opinions are.” This bit of market wisdom comes from Jesse L. Livermore, a trader famous for making and losing several million-dollar fortunes in his lifetime and providing us with the lessons he learned in “Reminiscences of a Stock Operator,” originally published in 1923.

Today, I’m going to share some quotes from the world’s most famous investors. Please write in to share your favorite if it doesn’t appear on this list; I might print it in a future column.

“When reward is at its pinnacle, risk is near at hand."--John (Jack) Bogle, founder of the Vanguard Group.

“Look at market fluctuations as your friend rather than your enemy. Profit from folly rather than participate in it."--Warren Buffett, the Oracle of Omaha and the third richest man in the world.

“Psychology is probably the most important factor in the market--and one that is least understood."--David Dreman, a contrarian investor and author.

“I don’t want a lot of good investments; I want a few outstanding ones."--Philip A. Fisher, growth investor and author of “Common Stocks and Uncommon Profits.”

“Even the intelligent investor is likely to need considerable willpower to keep from following the crowd."--Benjamin Graham, the Father of Value Investing and author of “Security Analysis” and “The Intelligent Investor.”

“If you stay half-alert, you can pick the spectacular performers right from your place of business or out of the neighborhood shopping mall, and long before Wall Street discovers them."--Peter Lynch, managed Fidelity Magellan Fund from 1977 to 1990, beating the S&P 500 Index in 11 of those 13 years, achieving an annual return of 29%.

“Successful stocks don’t tell you when to sell. When you feel like bragging, it’s probably time to sell."--John Neff, averaged annual total return of 13.7% (versus S&P 500’s 10.6%) while managing Vanguard’s Windsor Fund from 1964 to 1995.

“Since the market tends to go in the opposite direction of what the majority of people think, I would say 95% of all these people you hear on TV shows are giving you their personal opinion. And personal opinions are almost always worthless ... facts and markets are far more reliable."--William J. O’Neil, growth stock investor, CANSLIM author and founder of Investor’s Business Daily.

“Change is the investor’s only certainty."--Thomas Rowe Price Jr., growth stock investor and found of T. Rowe Price investment firm.

“Most leading stocks cannot spare the time and money to research smaller stocks. You are therefore more likely to find a bargain in this relatively underexploited area of the stock market,"--Julian Robertson, has the best hedge fund record during the 1980s and 1990s, with a compound rate of return of 32%.

“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much money you lose when you’re wrong."--George Soros, ran the Quantum Fund, which generated an average annual return of more than 30%.

“Invest at the point of maximum pessimism."--John Templeton, of the Templeton investment funds. In 1939, he famously bought $100 of every stock trading below $1 on the New York and American stock exchanges, totaling 104 stocks, of which 34 went bankrupt. He invested a total of $10,400 and sold four years later for more than $40,000.

That’s all for today. As I said above, please send in your favorite bit of investing wisdom. I’d love to add it to my own collection and share it with your fellow Cabot Wealth Advisory readers in a future issue.


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Timing is Everything

From the bear market bottom in 2003 to the bear market bottom in March 2009, subscribers to Cabot Market Letter made a stunning 94%. Compare that to the S&P, which LOST 18% over the same period! If you’re a Cabot Market Letter subscriber, this will not be surprising. You know how Michael Cintolo helps readers conserve cash when the market is unsupportive and to invest aggressively when the market trend is up. But if you’re not a subscriber yet, you owe it to yourself to take a look at the Cabot Market Letter.


Now, on to Cabot’s weekly Stock Market Analysis Video.

Cabot China & Emerging Market Report Editor Paul Goodwin is excited to see the Halter USX China index jump above its 25-day moving average, but warns against making any moves quite yet. Stocks discussed include Health Net (HNT), Pioneer Natural Resources (PXD) and Las Vegas Sands (LVS).

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In case you didn’t get a chance to read all the issues of Cabot Wealth Advisory this week and want to catch up on any investing and stock tips you might have missed, I have links below to each issue.

Cabot Wealth Advisory 6/7/10 - Daring to Be Cautious

On Monday, Cabot China & Emerging Markets Report Editor Paul Goodwin explains Cabot’s straightforward advice on what to do when markets are bearish (as they are now):

• Reduce or eliminate buying.
• Purge your portfolio of any weak or losing stocks and hold the cash.
• Put the stocks that are still performing well on a short leash.

Featured stock: Focus Media Holdings (FMCN), a pioneer in the out-of-home advertising business in China.


Cabot Wealth Advisory 6/10/10 - 3 Ways to Become a Better Investor

On Thursday, Cabot Market Letter and Cabot Top Ten Report Editor Michael Cintolo describes three points that will help you improve your results both during this downturn and, especially, when the bulls re-take control:

1) Track your results so you can learn from your stock trading, 2) Define the investing style that suits your personality, and 3) Use both offensive and defensive selling tools.


Until next time,

Elyse Andrews
Editor of Cabot Wealth Advisory

Elyse Andrews, is a contributor and former editor of Cabot Wealth Daily, focusing on educational topics on finance, the stock market and individual stocks.