Barry Ritholtz Quotes
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The electronics industry expanded rapidly and the seeds for the semiconductor and software revolution were planted. The postwar period also saw the suburbanization of America, the rise of the homeowner, the build-out of the interstate highway system, and the rise of automobile culture. Credit availability expanded dramatically.
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Here is a dirty little secret: Stock-picking is wildly overrated. Sure, it makes for great cocktail party chatter, and what is more fun than delving into a company's new products? But the truth is that individual stocks are riskier than broad indices.
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Owning a variety of asset classes means that some part of your portfolio will be doing well when the cyclical turmoil arises. A broadly diversified portfolio includes large capitalization stocks, small cap, emerging markets, fixed income, real estate and commodities.
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Outcome is simply the final score: Who won the game; what numbers came up in a roll of the dice; how high did a stock go. Outcome is the result, regardless of the method used to achieve it. It is not controllable.
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When it comes to investing, you are your own worst enemy.
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When markets are rallying, cash in the portfolio is a drag on performance, returning about zero.
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It is important for investors to understand what they do and don't know. Learn to recognize that you cannot possibly know what is going to happen in the future, and any investment plan that is dependent on accurately forecasting where markets will be next year is doomed to failure.
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Asset managers have different approaches, and I don't wish to suggest there is only one way to run money. There are many ways one can attempt to reduce risk, improve performance, lower drawdowns and reduce volatility.
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Indeed, eventually, random outcomes all revert to the mean, meaning that streaks eventually end. Understanding this is a key part of intelligent and rational investing.
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If you think too-big-to-fail banks are not worthy of investment because of their impossible-to-read balance sheets, well then, don't buy them.
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The good news is that economists are intelligent, engaging and often charming folks. The bad news is their work is often of little use to investors.
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History shows us that people are terrible about guessing what is going to happen - next week, next month, and especially next year.
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Any time you speak to people about their posture, you learn about their most recent investment activity. When someone just bought stocks, they tend to be bullish; someone who just sold is bearish.
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Hedge fund managers charge so much more than mutual fund managers; alpha is even harder to come by. They end up selling a variety of things beyond mere outperformance.
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Even when you are right, there are costs and taxes associated with being tactical. When you are wrong, there are opportunity costs.
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Often, investors will discover a manager after he's had a terrific run, usually when he lands on a magazine cover somewhere. Invariably, funds swell up with new investor money just before they revert to their long-term averages.
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People forget that although we can pinpoint the price, we can only guess at future earnings. The past isn't much help: It simply tells whether a market was pricey or cheap.
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Little white lies are told by humans all the time. Indeed, lying is often how we get through each day in a happy little bubble. We spend time and energy rationalizing our own behaviors, beliefs and decision-making processes.
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The consumption and production of energy is a major component of the global economy.
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Secular cycles are the long periods - as long as decades - that come to define each market era. These cycles alternate between long-term bull and bear markets.
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Any Wall Street advertising that does not go into the boring details of methodology is most likely to be pushing past performance.
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Yearly data put the rest of the noise into perspective. Most of the weekly or monthly random up-and-down movements get smoothed out. Ultimately, this is where long-term investors should be focused.
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If you are not making any mistakes, you are being excessively risk-averse. Investing involves risk, and that means you will occasionally be wrong. And although it is okay to be wrong, it is not okay to stay wrong.
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In New York, the former lack of real competition allowed taxis to extract excessive charges, regardless of the poor service.