10 Most Useful Quotes For Investing That Had Nothing To Do With Investing

A nontraditional approach to asset management wisdom

Charlie Munger one of the more renowned investors ever often applied in his strategy ideas that were not at all intended to apply to asset management. I got the idea after creating the “Ten Best Investing Quotes” post to A. Make that post a series where I try to refine the 10 best over time, and B. To do the same style of series but to apply it to quotes that were not talking about businesses or portfolio management.

I am also going to throw in a quick explanation justifying the usefulness of the logic and how it is very applicable to managing a portfolio.

1. “You can observe a lot just by watching” Yogi Bera

   Occasionally asset managers will try to turn lead into gold for multiple reasons. Maybe the manager sees an asset that appear incredibly cheap, or maybe they see an asset that is popular and want to join in on the party. Regardless, it is key for the manager to always be basing decisions on the facts not their preferences or emotions whether that be greed or fear. Going back to the simple facts combined with the competitive position of the business/industry is more profitable than wanting something to be true.

2. “You don’t rise to the level of your goals, you fall to the level of your systems” James Clear

   I am sure that many investors have been realizing the truth of number 2 over the past week or two. Weak systems that were built on the “Greater Fool Theory” rather than private market value, system using margins, derivatives, and other instruments, and people who know almost nothing about the assets their money is in have felt the consequences of preparing to fail. Having a system and strategy that does not require being correct 90%+ of the time is better than needing nerves of steel constantly with perfect judgement.

3. “The only certainty, is that nothing is certain”-Pliny the Elder

   Howard Marks thinks a lot about this kind of thing. Jeff Bezos agrees that you never make bet the company type wagers unless you absolutely need to, because a repetitive pattern of this will one day result in there being no company. Managing a portfolio is no different.

4. “Comparison is the thief of joy” Seneca

   How often do investors think to themselves if only I had invested more then, if only I had bought that stock, if only I had that environment, if only I had a start like them? The answer is way too often. All we have is today, and our best judgement to walk into the future, we can’t go back in time and buy an Amazon, Costco, or Microsoft right when it first started, or right in their biggest crash. There will be mistakes, there will always be someone making more money than you(a good chance in a really stupid way), but also blessings that we received that others did not. Let’s not focus on the unchangeable or perfection but instead being good.

5. “Feelings are just visitors. Let them come and go” Mooji

   As I made this list, I have realized how heavily stoicism is incorporated into portfolio management done well. There will be many times when even the best portfolio managers are tempted to do quite irrational things, they never do those in a big way, that’s why they are the best managers. The asset managers that are the best, have just as much discipline as they do insight.

6. “Chance favors only the prepared mind” Louis Pasteur

   To a keen investor during the drops of any good business or an industry or the market as a whole, they will be able to turn that into a huge plus rather than a negative. They should be able to do it not just because of cash stored, but because they already have a large background of information to go and be decisive on whatever bargains pop up.

7. “Knowing yourself is the beginning of all wisdoms” Aristotle

   Like Benjamin Graham said the biggest enemy of the investor is himself. More than any negative turn on a company in your portfolio, or a drop in the market it is the investor who did not understand their circle of competence and is unable to have discipline in their strategy who suffers the biggest losses.

8. “Adversity removes the fragile, and spares the robust” Unknown

   An investing strategy that only works in good times is no real strategy at all; a strategy blindly based more on hype and perception than real value will eventually suffer the consequences when faced with hardship.

9. “Nobody goes there anymore it’s too crowded” Yogi Bera

   Charlie Munger once said it is important to fish where the fish are, the better version of that quote from Monish Pabrai is to fish where the fish are and the fishermen are not. Only so high of a percentage of American’s assets can be in stocks, a stock price can only go so high before it becomes a ticking time bomb, acting unpopular can be profitable when investing.

10. “Sometimes you win, Sometimes you learn” John C Maxwell

    Every investor has their mistakes, I certainly have already had mine. Maybe the main trait that distinguishes the mediocre investor from the great is that they actually learn from their mistakes, while costly lessons should not be sought out, they can ultimately be far more valuable than the money lost.

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