10 Instructive Quotes About Investing in Stock Market

Introduction

Investing, especially in the stock market, is a tricky affair. One has to study it, in detail, in order to understand it well. The understanding is also required to be backed up with emotional stability. Some of the big names, in this field, are Benjamin Graham, Phillip Fisher, John Templeton, Warren Buffett, John Bogle, Ray Dalio, Peter Lynch, Howard Marks, and Joel Greenblat who have written books on investing. One can read these books and become wiser on the subject. One may also listen to their speeches and interviews that are available on Youtube. However, in this blog post, I have made an effort to present 10 best quotes on investing from some of these heavyweights and a few others. The purpose is to share with you their wisdom on investing in a condensed form.

“The Stock Market is a Voting Machine in the Short Term and a Weighing Machine in the Long Term”

This quote is from Benjamin Graham: author of the bible of investing, “The Intelligent Investor”. It explains the difference between a short-term and a long-term view of the market in a befitting manner.

Short-term view is characterized by emotions and sentiments and says nothing substantive about the quality of a business whereas, in the long term, the market makes a rational assessment of what the business is worth and gives it a price tag accordingly.

The school of value investing is an embodiment of this great thought from Benjamin Graham.

“The Stock Market is a Place Where Money is Gradually Transferred From the Impatient to the Patient”

Warren Buffett, who is a living legend in the field of investing, said this. It highlights the importance of patience in investing. Nothing worthwhile can be accomplished in a day or two. You have to give your investments time to fully realize their potential. If you carry out thorough research to identify the right businesses, buy them at the appropriate price, and completely insulate yourself from the daily noise or the market volatility, you are going to end up very well. If this style of investing doesn’t appeal to you and you want to benefit from the daily ups and downs in the market, according to this quote, your money is going to be gradually transferred to someone who is sitting patiently, doing nothing, after having bought a share in those businesses that you also own in fits and starts.

“Price is What You Pay, the Value is What You Get”

This is another quote from Warren Buffett. It alludes to the price-value matrix which provides an authentic framework of investing. Price is a tangible factor which means the price of a particular stock at a given time. This is visible to everyone. The value is, however, intangible and refers to the intrinsic value of the business or a share of it. Different people may view the value of a business differently. The whole art of investing is being able to evaluate a business correctly and then see whether it justifies the price at which it is available or not. It is very risky not to have any idea about the value of a share and try to play the price game only. The best thing to do is to buy something much more valuable than the price for which it is available. It will give you a margin of safety, which is another important principle of investing.

Phillip Fisher, who is a respected name in this field: said the same thing in these words, “The stock market is filled with individuals who know the price of everything, but the value of nothing.”

“An Investment in Knowledge Pays the Best Interest”

One of the American founding fathers: Benjamin Franklin said this. Although this quote is widely applicable to all walks of life, it is extremely relevant in investing. Being knowledgeable about what you are doing pays richly in investing. There is a vast majority of people who only know the price history of a share before investing in it. This style of investing can result in a serious loss of capital.

“Be Fearful When Others are Greedy. Be Greedy When Others are Fearful”

This is another one from Warren Buffett. It is said that fear and greed must be reined in if one wants to become a successful investor. The decisions made under the influence of these two emotions can be harmful in investing. Warren Buffet, in this quote, has explained the crux of investing in terms of these emotions. If you have shortlisted your businesses correctly, all you need to do is go against the grain. Be a contrarian. Think independently.

“Know What You Own, and Know Why You Own It”

Peter Lynch is another credible name in investing. He is the author of two very good books on investing: “Learn to Earn” and “One Up on Wall Street”. This quote also underscores the importance of thorough research. You must carry out detailed prior research on what you are going to own and know the reason why you want to own it. It is said that while buying a share, you must write down why you are buying it. It will help you decide when and why you should sell it.

“Don’t Look for the Needle in the Haystack. Just Buy the Haystack!”

John Bogle was the founder of Vanguard Funds. He played a pivotal role in popularizing index investing. He was personally against stock picking, especially for a common person who cannot spare time for proper research. His view was that instead of betting on the next “Google” or “Amazon”, it should be preferable to buy the entire index and you are, automatically, going to own all the businesses, according to their weightage in the index, that will become big, in future.

“In a Bull Market, Luck Looks Like Skill”

This quote is from Howard Marks, who is the author of a very good book on investing: “The Most Important Thing”. It carries a lot of wisdom with regard to life, in general, and investing in the stock market, in particular. It is extremely important to know whether a particular success is a fluke or is due to consistent hard work and other essential attributes. In a bull market, since everybody is making money, this distinction is easily lost and one may be misled to believe that you can earn money through shortcuts also. Inevitably, when the market turns bearish, only those survive who are strongly grounded and know what they are doing.

Another very apt quote from the same gentleman reads: Don’t admire people who are right for wrong reasons.

On the same subject, Warren Buffett had this to say: It is only when the tide goes down you come to know who all were swimming naked!

“The Four Most Dangerous Words in Investing Are, It’s Different This Time”

These are the golden words from Sir John Templeton who was a famous investor, fund manager, and philanthropist in the 20th century.

Every sudden change in the capital markets can be attributed to either of the two primordial human emotions: fear and greed. However, when it is happening, people are inclined to believe that, this time, it is different. Soon they have to realize that it is “the same wine in a new bottle”. Therefore, the best solution is to completely disregard the market volatility and sit tight on your investments. Soon the fog is going to clear off and those who acted in haste, under fear or greed, will be found repenting.

“Investing Should Be More Like Watching Paint Dry or Watching Grass Grow. If You Want Excitement, Take $800 and Go to Las Vegas”

Paul Samuelson was an American economist. He won the Nobel prize in Economics in 1970. His quote sums up the reality of investing very well.

Investing is boring and unexciting. It demands idleness most of the time. For a good investor, it is far better to read a lot and watch less of daily news on electronic media. Fewer buying and selling decisions and a lot of thinking and research behind those decisions is what is needed.

Another quote on the same subject is: Most of man’s problems stem from his inability to sit in a room quietly.

Conclusion

These quotes carry a lot of wisdom for a stock market investor. One can learn that emotions need to be controlled while investing. Thorough research is a must. Hearsay and rumors must be banished. We should have our own perspective about the market and know why we took a buying or selling decision. There are no shortcuts. Anything good takes time to accomplish.

How did you find this content? Please comment and give suggestions, if you have any.

My other articles you may find useful are:

How to Make a Personal Financial Plan – Basic Considerations

Personal Finance – A Suggested Checklist

Investment vs Speculation

A Brief History of Money

Why I Started a Blog on Personal Finance

Anatomy of Financial Risk

Debt, Equity, and Real Estate: An Overview

Retirement Planning

How to Compare Equity and Real Estate as Investment Options

How Stock Market Works and How to Work in Stock Market?