Barry Ritholtz Quotes
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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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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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Forecasting is simply not a strength of the species; we are much better with tools and narrative storytelling.
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When it comes to investing, there is no such thing as a one-size-fits-all portfolio.
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Never forget this simple truism: Forecasting is marketing, plain and simple.
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The bottom line is this: Cash, in modest increments, has a role in any portfolio. But unless you are Warren Buffett, you should limit it to 2 or 3 percent.
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Most of the time, economic data is fairly benign. I don't wish to imply it is meaningless, but it is not a driver of stock markets. Indeed, the correlation between economic noise and how equity markets perform has been wildly overemphasized.
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Markets are frequently ahead of, and often out of sync with, the economy.
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When you buy anything with lots of leverage, it does not require a whole lot to go wrong to lose it all.
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Rather than engage in the sort of selective retention that so many investors tend to do and pretend mistakes never happened, I prefer to 'own' them. This allows me to learn from them and, with any luck, avoid making the same errors again.
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Whenever you hear a discussion about the short-term swings in any given stock's price, your immediate thought should be whether it matters to why you are investing.
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You, your employer and your plan's investment managers fail to follow even the most basic rules of investing. You overtrade, chase performance, do not think long term. All of you - All Of You - have done a horrible job managing your retirement plans.
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I have been a member of the Microsoft-bashing society for quite some time.
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To know whether stocks are cheap or pricey, we typically look at price-to-earnings ratio. Valuation is a tougher question than many folks realize.
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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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Whenever you try to pick market tops and bottoms, you are making a prediction. Guessing what stock is going to outperform the market is forecasting, as is selling a stock for no apparent reason. Indeed, nearly all capital decisions made by most people are unconscious predictions.
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A number of bloggers in economics and the financial sector have risen to prominence through the sheer strength of their work. Note it was not their family connections nor ties to Ivy League schools or elite banks, but rather the strength of their research, analysis and writing.
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History is replete with examples of tech firms that were marginalized by new companies and technologies.
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Commissions add up, taxes are a big drag, margin ain't cheap. A good accountant costs money as well. The math on this one is obvious, yet investors often fail to recognize it: Keep your costs low and your turnover lower, and you will win in the end.
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'Returnless risk' is not how you prepare for a decent retirement.
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Investing is about making probabilistic decisions with limited information about an unknowable future. The variables are well known, as are the possible outcomes.
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Shopmas now begins on Thanksgiving Day. Apparently, escaping the families you cannot stand to spend another minute with on Thanksgiving Day to go buy them gifts is how some Americans show their affection for one another. Weird.
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The way we finance homes in this country is slow, filled with middlemen, who run a nonstandardized evaluation process. This makes financing a home cumbersome and difficult.
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You have a natural tendency to want an emotionally satisfying tale - and to make investments based on that - despite times when the actual data may be telling you something different.