Barry Ritholtz Quotes
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Narrative drives most of economics. Everything seems to be part of a story, and how that story is told often leads to critical error.
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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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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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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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A hedge fund manager whose clients demand monthly performance reports has different needs than any individual investors with a 20-year time horizon. The needs of that long-term investor differ markedly from someone who is retiring in three years.
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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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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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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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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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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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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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When it comes to investing, you are your own worst enemy.
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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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Have a well-thought financial plan that is not dependent upon correctly guessing what will happen in the future.
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In New York, the former lack of real competition allowed taxis to extract excessive charges, regardless of the poor service.
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The consumption and production of energy is a major component of the global economy.
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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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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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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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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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I credit Google for having the foresight to identify threats to its main business of selling advertising against search results. The potential loss of market share in the mobile space led them to the Android acquisition.
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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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TV producers want ratings and are willing to do nearly anything to get them. They gin up artificial conflicts and create an urgency for even the most minor of economic data points.
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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.