Investing Quotes & Advice from The Greatest Minds Alive

Buffett, Munger, Lynch, Klarman and more

Throughout the years, I have always had the habit of taking notes when reading interesting non-fiction books.

Since most of those books are actually books about investing and personal finance in my case, I basically now have a notebook full of quotes, thoughts and excerpts from famous successful investors that I’ve collected over the years.

Here is a collection of some of my favorite.

Monish Pabrai

Pabrai is a value investor from India. He became famous for his unique style of investing, which is essentially that of shameless copying (not copying trades, rather principles and theories). What he does is take some of the best ideas from other value investors such as Munger and Buffett, make them his own, and then apply them to his investments.

One of the concepts he always likes to stress is the following:

“The single biggest advantage a value investor has is not IQ. It’s patience and waiting. It’s waiting for the right pitch, and possibly waiting many years at a loss for the right pitch to come”

This seems especially true in today’s exuberant but also turbulent market, where it seems incredibly hard to find the right investments. The lesson to be learned here is that it’s okay to wait a few years to find the next great thing, especially when you can’t find something you like.

You don’t have to settle for the less-bad alternative when you can’t find anything truly great. He especially likes to stresses how you don’t need to be in a rush when investing, since it’s a game of a lifetime, not a single month or two.

And then his second quote is more about the value investing mindset:

“A great investment is one where you can say:

‘Heads I win, Tails I barely lose any money’”

The message here is that the only way to make sure you don’t lose money in the stock market is to pick investments where you are good no matter what happens.

Charlie Munger

Charlie Munger is the vice-chairman of Berkshire Hathaway and also Warren Buffett’s investing pal. His message for new investors is pretty straight forward:

“Avoiding stupidity is easier than seeking brilliance”

This is something many investors tend to forget. To do well in the stock market, but most importantly over one’s financial life, you don’t need to find the absolute best investments. You just have to find good ones that will do the job well, even if they’re not the best nor the fanciest.

It doesn’t matter that X investor did 15% a year and you did 10%, you don’t have to beat him to be a good investor. The point is that long term wealth is the only thing that matters, which is something that can only be done if stupid things are avoided in the market.

And about diversification, Munger said this:

I find it much easier to find four or five investments where I have a pretty reasonable chance of being right that they are way above average. I think it’s much easier to find five than it is to find fifty or a hundred.

Peter Lynch

Peter Lynch is a value investor and also the former manager of the Magellan Fund, where he managed to turn $18 million into $14 billion in just 13 years. He has a track record of beating the market by more than double, and his book “One Up On Wall Street” is one of the best out there.

His famous quote is similar to the one of Pabrai about being patient:

“I’ve always said that if you look at ten companies, you’ll find one that’s interesting. If you look at twenty, you‘ll find two; if you look at one hundred, you’ll find ten. The person that turns over the most rocks wins the game in the long run, not the one that buys the most.”

And then, when asked about stock market crashes, he responded with this:

“Far more money has been lost preparing and timing corrections than what has been lost in the corrections themselves.”

Warren Buffett

Warren Buffett is probably the most famous investor of all time. There are also a lot of quotes coming from him around the internet, but my favorite one is about personal finance more than investing.

Rational people don’t risk what they have and need for something they don’t have and don’t need

Which is mostly about using leverage and taking on too much risk when investing. It’s never a good thing when you risk money you have to chase some bigger some you might never earn.

Others

This next one is from the trader and value investor Adam Khoo, which also has a very insightful YouTube channel about the topic. He doesn’t quite fit the description of the other investors, and he’s surely not as famous, but this quote was too good to not include it:

“The stock market is like a bus going uphill. As the bus goes up, more and more people jump on the bus. When there are too many people on the bus, the bus gets too heavy and it cannot keep going up. The driver will then have to swerve and jerk in order to throw people off (the weak holders that panic and sell). Only when enough people get thrown off the bus (weak retail investors that lose faith and sell out), can the bus be light enough to continue the journey higher.”

And finally, the last one comes from American businessman and investor Shelby Davis:

“You make the most money during a bear market, you just don’t realize it at the time”

That’s it for today. If you’d like to learn more about the concepts these great investors have talked about in the quotes, check out the articles I put below each quote.

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