Pithy Wisdom That Changed How I Think About Investing

By Markets Fool.com

I'm a fan of pithy wisdom.

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You can often gain more insight from a single sentence than you can in a whole article or book, because knowledge has no points awarded for difficulty (but book contracts do). As one friend put it: Most books should be articles; most articles should be Tweets.

Here are a bunch of quotes that changed how I think about investing. A lot of these weren't intended to describe investing, but they're all relevant to the problems and hassles investors face.

"A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguishable from the truth."-- Daniel Kahneman

"Timingthe market is a fool's game, whereas time in the market is your greatest natural advantage.--Nick Murray

"In expert tennis, 80% of the points are won, while in amateur tennis, 80% are lost. The same is true for wrestling, chess, and investing: Beginners should focus on avoiding mistakes, experts on making great moves."-- Erik Falkenstein

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"I was once asked, at a journalism conference, how I defined my job. I said: My job is to write the exact same thing between 50 and 100 times a year in such a way that neither my editors nor my readers will ever think I am repeating myself. That's because good advice rarely changes, while markets change constantly. The temptation to pander is almost irresistible. And while people need good advice, what they want is advice that sounds good." -- Jason Zweig

"Expertise is great, but it has a bad side effect. It tends to create an inability to accept new ideas." --Dean Williams

"What information consumes is rather obvious: it consumes the attention of the recipients. Hence a wealth of information creates a poverty of attention."-- Herbert Simon

"When you first start to study a field, it seems like you have to memorize a zillion things. You don't. What you need is to identify the core principles generally three to twelve of them that govern the field. The million things you thought you had to memorize are simply various combinations of the core principles." --John Reed

"It is remarkable how much long term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent." --Charlie Munger

"What looks like tomorrow's problem is rarely the real problem when tomorrow rolls around."-- Dan Gardner

"When a possibility is unfamiliar to us, we do not even think about it."-- Nate Silver

"People focus on role models; it is more effective to find antimodels -- people you don't want to resemble when you grow up." --Nassim Taleb

"Being slow and steady means that you're willing to exchange the opportunity of making a killing for the assurance of never getting killed." --Carl Richards

"The market does not beat them. They beat themselves, because though they have brains they cannot sit tight."-- Jesse Livermore

"You never know what the American public is going to do, but you do know they will do it all at once."-- Bill Seidman

"In the corporate world, if you have analysts, due diligence, and no horse sense, you've just described hell." --Charlie Munger

"The wise ones bet heavily when the world offers them that opportunity. They bet big when they have the odds. And the rest of the time, they don't. It's just that simple."-- Charlie Munger

"No one can foresee the consequences of trivia and accident, and for that reason alone, the future will forever be filled with surprises." --Dan Gardner

"Pundits forecast not because they know, but because they are asked." --John Kenneth Galbraith

"A dollar picked up in the road is more satisfaction to us than the 99 which we had to work for, and the money won in the stock market snuggles into our hearts in the same way."-- Mark Twain

"Men resist randomness, markets resist prophecy." Maggie Mahar

"My conceptual framework, which basically emphasizes the importance of misconceptions, makes me extremely critical of my own decisions. I know that I am bound to be wrong, and therefore am more likely to correct my own mistakes."-- George Soros

"If you have competence, you know the edge. It wouldn't be a competence if you didn't know where the boundaries lie. Asking whether you've passed the boundary is a question that almost answers itself." Charlie Munger

"Cultivating a garden takes lots of hard work, but at some point you have to let the plants grow. If you have a plan, let it work."Carl Richards

"Read 500 pages [of books, magazines, reports, etc.] every day. That's how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it." Warren Buffet

"To better avoid errors, you should talk to people who disagree with you and you should talk to people who are not in the same emotional situation you are." Daniel Kahneman

"People do not get what they want or what they expect from the markets; they get what they deserve."-- Bill Bonner

"Spend less than you make. Always be saving something. Put it into a tax-deferred account. Over time, it will begin to amount to something. This is such a no-brainer!" -- Charlie Munger

"All men's miseries derive from not being able to sit in a quiet room alone."-- Blaise Pascal

"Based on my own personal experience, rarely do more than three or four variables really count. Everything else is noise."
--
Marty Whitman

"In investing, what is comfortable is rarely profitable." Rob Arnott

"The stock market is a giant distraction to the business of investing." Jack Bogle [Invest in companies, not stocks]

"A true bubble is when something is overvaluedandintensely believed."-- Peter Thiel

"Using volatility as a measure of risk is nuts. Risk to us is 1) the risk of permanent loss of capital, or 2) the risk of inadequate return." Charlie Munger

"Knowledge is subtractive, not additive -- what we subtract (reduction by what does not work, what not to do), not what we add (what to do)." Nassim Taleb

"To achieve long-term success over many financial market and economic cycles, observing a few rules is not enough. Too many things change too quickly in the investment world for that approach to succeed. It is necessary instead to understand the rationale behind the rules in order to appreciate why they work when they do and don't when they don't."Seth Klarman

"The way to success is to (1) get to work early, (2) stay late, and (3) strike oil." Paul Getty, likely apocryphal

"You have never lost money in stocks over any 20-year period, but you have wiped out half your portfolio in bonds [after inflation]. So which is the riskier asset?" Jeremy Siegel

"Acknowledging what you don't know is the dawning of wisdom." --Charlie Munger

For more:

Performance vs. outcomes

Why does pessimism sound so smart?

Things I'm pretty sure about

Hard truths for investors to wrap their heads around

How the investing industry could change

The article Pithy Wisdom That Changed How I Think About Investing originally appeared on Fool.com.

Contact Morgan Housel at mhousel@fool.com. The Motley Fool has a disclosure policy.