Friday, December 12, 2014

10 Legendary Investment Rules From Legendary Investors

I just read this fantastic article by Lance Roberts, which is such a timely reminder.

These guys are all f***ing legendary. I would rather meet anyone of them instead of Taylor Swift. I actually might pass out if I see them!

(Hey, would you look at that! 10/10 guys! Is finance a sexist world or what? Feminists out there be ragin' right now)

Who Where What
Jeffrey Gundlach DoubleLine "The trick is to take risks and be paid for taking those risks, but to take a diversified basket of risks in a portfolio."
Ray Dalio Bridgewater Associates “The biggest mistake investors make is to believe that what happened in the recent past is likely to persist. They assume that something that was a good investment in the recent past is still a good investment. Typically, high past returns simply imply that an asset has become more expensive and is a poorer, not better, investment.”
Seth Klarman Baupost “Most investors are primarily oriented toward return, how much they can make and pay little attention to risk, how much they can lose.”
Jeremy Grantham GMO “You don’t get rewarded for taking risk; you get rewarded for buying cheap assets. And if the assets you bought got pushed up in price simply because they were risky, then you are not going to be rewarded for taking a risk; you are going to be punished for it.” 
Jesse Livermore - “The speculator’s deadly enemies are: ignorance, greed, fear and hope. All the statute books in the world and all the rule books on all the Exchanges of the earth cannot eliminate these from the human animal….”
Howard Marks Oaktree Capital Management “Rule No. 1:  Most things will prove to be cyclical. – Rule No. 2:  Some of the greatest opportunities for gain and loss come when other people forget Rule No. 1.”
James Montier GMO "There is a simple, although not easy alternative [to forecasting]... Buy when an asset is cheap, and sell when an asset gets expensive.... Valuation is the primary determinant of long-term returns, and the closest thing we have to a law of gravity in finance."
George Soros Soros Capital Management “It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.
Jason Zweig Wall Street Journal “Regression to the mean is the most powerful law in financial physics:Periods of above-average performance are inevitably followed by below-average returns, and bad times inevitably set the stage for surprisingly good performance.
Howard Marks Oaktree Capital Management The biggest investing errors come not from factors that are informational or analytical, but from those that are psychological.” 

This is of course an ugly ass table if there ever was one, but hell, if I was good at HTML and website editing, the rest of my blog wouldn't look this bad, would it? Anyway, this is definitely a keeper of an article, which is why I'm specifically archiving it in a post on my blog forever! These are timeless quotes, which are gonna be permalinked, just like Bob Farrell's 10 Rules and Jason Zweig's timeless advice.