Inspiration

20 Investment quotes from legendary stock market investors

Chamath Palihapitiya, Peter Lynch, Warren Buffett, Charlie Munger and Benjamin Graham. These legendary stock market investors and others have given us many timeless investment quotes. They have definitely shaped my life as an investor for over the last 6 years. I have read most of their books, studied many of their reports and I watched a lot of their interviews on YouTube.

Actually, recently I was browsing through one of my notes and an investment quote caught my attention. It made me think about how it shaped my investment style. At the same time I started to realize how many other great investors have inspired me to improve my investing style.

Some of their quotes have really made me a lot of money ๐Ÿ’ช

Hence, in this post I would like to share with you 20 timeless investment quotes which have made me a better investor. As you will notice, some of them stand out in their simplicity.

Simplicity is the ultimate sophistication.

 Clare Boothe Luce

โœจ Investment quotes focused on long-term investing

The following investing quotes have shaped me as an investor to think long term.

Someoneโ€™s sitting in the shade today because someone planted a tree a long time ago – Warren Buffett

Investment quotes:
Someoneโ€™s sitting in the shade today because someone planted a tree a long time ago - Warren Buffett

I don’t just invest for myself, but also for my family. I am in it for the long game and let’s call it multi-generational. My kids should have a better financial start than I had, hence why I consider the start of my journey as planting a tree. This tree will hopefully give them some shade later in life while they’re having their own duties. At least they shouldn’t need to work in the full sun.

Time in the market beats market timing – Ken Fisher

I invest based on my own business thesis for the company and my own judgment regarding the fair value of the stock. This means that I truly have no clue what the price of a stock will do the minute after I buy it. This is why this quote stuck so much with me. I realize that I can’t time the market, but I can form an opinion about whether it’s worth buying at a given price.

Unfortunately it often does take time for my thesis to play out. Over time I have learnt that the compounding effect of dividends and continuously dollar cost averaging into the the market is what really creates my wealth.

Go for a business that any idiot can run – because sooner or later, any idiot is probably going to run it. – Peter Lynch

This quote from Peter Lynch resonates so much with me, because it tells me that the fundamental structures, the culture and the company’s moat are so strong that you don’t need to worry that much about a poor performing CEO. The CEO will likely get replaced anyway, before their impact would start to hurt the company. A good example of such company is Medtronic. In my opinion their former CEO was really weak, but he simply wasn’t able to screw up even more due to the governance in the company.

That’s also why such companies make excellent long-term investments.

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

To me the quote is about being streetwise instead of over-analyitical. Unfortunately it is my natural habitat to over-analyse things, hence why this quote is so important to me. I think I’m not there yet, but this quote is hear to remind me. I need to get better in the simplicity to ensure that I reach my goals within 10 years from now.

โœจ Investment quotes that keep me rational and focused on value

The following investment quotes have shaped me as a value and contrarian investor.

Rule No. 1: Never lose money. Rule No. 2: Don’t forget rule No. 1′ – Warren Buffett

I love this quote, because it is really about using a margin of safety when investing in companies. You can see that in my stock analysis posts, because I always apply a margin of safety to my fair value estimations. This allows me to still avoid huge losses if I’m wrong.

Unfortunately I did lose money, although those are still unrealized losses. As an example, I’m pretty in the red regarding my oil stocks and I’m not sure whether I will be able to make up for those losses in the upcoming 5 years.

It’s far better to buy a wonderful business at a fair price than a fair business at a wonderful price – Warren Buffett

Now, this is a little bit to the contrary from the former quote from uncle Warren, but what I love about this quote is exactly the opposite. I really like here that some stocks are in a bull-market summer for several years. Applying a margin-of-safety to their fair value might result in always chasing the stock and never getting a position in it.

A good example of such stock is Starbucks for me. I have been chasing this stock for 5 years now, because I have always been looking for this margin-of-safety. I luckily didn’t make the same mistake on Microsoft, but as you can see, I’m still learning here.

Price is what you pay, value is what you get – Warren Buffett

Uncle Warren has a lot of words-of-wisdom in this value section ๐Ÿ˜‰ This quote really resonates with me, because it triggers me to think in value first, before looking at the price.

This is exactly how I analyze my stocks. I first research the strength of a company’s product portfolio and their 3 financial statements. After that I calculate their fair value and only then I really start to look at their price.

I really started doing it like this after I fully grasped what this quote was about. Unfortunately I still see a lot of people struggling with this. Especially on Twitter, several people seem to be obsessed by the prices and their daily fluctuations. I was there as well, but 10 years ago.

In the short run, the market is a voting machine, but in the long run it is a weighing machine. – Benjamin Graham

Investment quotes: In the short run, the market is a voting machine, but in the long run it is a weighing machine. - Benjamin Graham

This quote really resonates with me when investing for value. As an example, often people challenge my optimism regarding Danone. One of the reasons are some of the current suppressed valuation metrics. Another reason is people that are watching at were the stock price was a year ago.

I clearly see the value in Danone, but I do know that it takes time to for my thesis to play out. That’s why in the short run I might not see a lot of price appreciation, but in the long run the underlying value will put a strong floor below the stock price and eventually push it up. Until then I’ll keep averaging in any time it drops under 55 Euro.

Wall Street has a few prudent principles; the trouble is that they are always forgotten when they are most needed. – Benjamin Graham

It’s no surprise that Warren Buffett was a student of Benjamin Graham. This quote resonates a lot with me when thinking about the current hype in tech stocks. It just feels that proper valuation metrics might not apply anymore and growth forecasts are literally reaching into the clouds.

This quote tells us that we need to watch out now. Countries and societies are at their peak in debts and will need all the cash they need once we start talking valuation again. Wall Street is partying like never before, while we all know that we’re on the heroin of the FED and the ECB. This quote reminds me about it and prevents me from acting on a fear of missing out (FOMO)

โœจ Investment quotes about the psychology during market crashes

This is one of the hardest situations for me to invest in. It requires me to have my head clear and ultimate focus to make wise investment decisions during a market crash. Where is the blast zone? How are the balance sheets? How could a recovery look like?

Having said that, the below investment quotes have given me a lot of guidance during March’s stock market crash.

Whenever I see a stock market explode, six to 12 months later you are in a full blown recovery. – Stanley Druckenmiller

This investment quote is really the one that brings calmness to me. Real stock market crashes make you sometimes believe that there’s an apocalypse coming. I mean, how many people probably thought that Covid-19 might just wipe out half of society?

And here we are, the virus is still around (I’m not too optimistic about it) and the stock market is again around all-time highs. Yes, the FED plays a large role here, but in the end it has helped us to protect our capital in the stock market.

This investing quote gave me lot’s of comfort to heavily increase my investments during April and May.

Trying to catch the bottom on a falling stock is like trying to catch a falling knife. Itโ€™s normally a good idea to wait until the knife hits the ground and sticks, then vibrates for a while and settles down before you try to grab it. – Peter Lynch

This investment quote says it all about when to buy a stock which is rapidly declining in price. We don’t need to fish exactly at the bottom.

Let the price drop until it starts to bottom. Wait a bit to ensure it isn’t a dead cat bounce. In the meanwhile do your research to once again validate the fundamentals, but ignore the noise.

You neither need to be a hero to buy it at the ultimate bottom, but buy it once the “volatility in vibrations” are over. Hence why the falling knife analogy resonates so much with me.

Be fearful when others are greedy. Be greedy when others are fearful – Warren Buffett

investment quotes
Be fearful when others are greedy. Be greedy when others are fearful - Warren Buffett

This is a very popular quote in the investing community. Many people quote it, but mostly during good times. I don’t know why it is exactly, but probably just because it sounds “cool”.

Where are the investors that are buying Royal Dutch Shell right now?

Hence, how many investors truly have the guts to be greedy when so many people are totally afraid about a certain stock due to the headlines?

I noticed this three years ago about Abbvie. Many investors shy-ed away from it when it dropped all the way to $60.00. People thought that the impact on their sales due to the Humira patent experiration would almost be the end for the company as we knew it.

I just did a simple calculation and noticed that the company without any Humira sales would still spot a ~20 Price to Earnings ratio, in line with other Pharmaceuticals at the time. Hence, that was the moment were I became greedy and within few months bought a full-sized position.

The time to buy is when there’s blood in the streets – Baron Rothschild

This is a similar quote to the one above from Warren Buffett. I guess that this one is just older and therefore more classic. Actually, historians are still unclear about the exact context of this quote and whether it really originates from Baron Rothschild.

Having said that, I like it a lot and I reminded myself often about it back in March during the height of the stock market crash.

โœจ General Investment quotes related to Psychology

These investment quotes are not so much related to a certain theme, but I learnt to appreciate them for their applicability in many situations.

The four most dangerous words in investing are: ‘this time it’s different.'” – Sir John Templeton

Isn’t it this time different?

No, the high valuations in tech stocks are really not the same as back in the late 90’s. No, Wirecard fraud and Nikola fraud suspicions are really isolated. The current tech rally is purely driven on fundamentals and those companies actually make profits.

Well, I personally have a feeling that this time it’s really different….

Good investors have to choose how to allocate their mind share with the precious capital they have – Chamath Palihapitiya

This investment quote is really resonating with me, because time is simply scarce. Hence I should make wise decisions in how I spend my time and what to focus on.

I’ve chosen dividend growth investing as a strategy and I need to spend all my focus on this to make it a success. That’s one of the main reasons why I don’t spend too much time on growth investing. I just need all my mind share for it and I can’t be too much distracted about other type of investment strategies.

Your job as a smart investor is to separate the facts and the news from the fiction and the noise. – Chamath Palihapitiya

As you can see, Chamath is a pretty smart guy. He isn’t 80+ yet or among the dead and he’s already becoming a popular investor who often gets quoted.

This is one of those investment quotes that resonates a lot with me when analyzing stocks. I first focus on the facts by just analyzing the business and then try to consume some news to get an understanding on some of the risks. I do this though by reading sec.gov, the investor relations website or a quality website / news paper (i.e. ft.com)

This often cancels out all the noise for me that I typically find on social media.

Investing isn’t about beating others at their game. It’s about controlling yourself at your own game. – Benjamin Graham

Investment quotes
Investing isn't about beating others at their game. It's about controlling yourself at your own game. - Benjamin Graham

This quote is the exact reason why I’m not tracking my performance against a benchmark like the S&P 500. I honestly have no clue how I’m performing there. I guess not so well, because my portfolio is limited in growth stocks.

What I’m mostly caring about is a growing amount of projected annual dividend income, aka my personal cash flow. I need to see it grow for my portfolio by approximately 6% and that’s the game I’m playing towards financial independence.

Do you know the only thing that gives me pleasure? It’s to see my dividends coming in. – John Rockefeller

O yeah! I love those juicy dividends!

Well, maybe it’s not totally true, because being with my wife and kids also gives me a lot of pleasure. Lucikly that I can have it all and that I’m not forced to chose ๐Ÿ˜‰

What the wise man does in the beginning, the fool does in the end. – Howard Marks

This quote is so telling. Sometimes I’m probably really the fool. As an example, there are many people that gave up on the oil industry already and they might even be right. I still believe in it though, hence why I’m not cutting my positions.

Time will tell me whether I’m the fool. This investment quote keeps me honest.

There are old investors, and there are bold investors, but there are no old bold investors. – Howard Marks

I was checking a lot hair cuts from famous investors after the first time reading this quote. It took me some though to figure out the true meaning of this quote ๐Ÿ˜‰

Having said that, this quote tells me that investing is not about aggressive risk-taking. Famous investors have often made lot’s of money by some simple and boring investment strategies. The ultimate example is Warren Buffett with his investments in Sees Candy’s and Coka Cola.

I prefer predictability and consistency. Therefore this investment quote is resonating so much with me.


What do you think about these investment quotes? Which one resonates most with you as an investor?

Is there a quote missing which in your opinion is your personal favorite? Is so, let me know in the comments ๐Ÿ‘‡

Like always, I hope that you enjoyed this post ๐Ÿ˜Ž

PS: donโ€™t forget that every comment = 1 Euro to Kiva

Yours Truly,

European Dividend Growth Investor


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Disclaimer

Iโ€™m not a certified financial planner/advisor nor a certified financial analyst nor an economist nor a CPA nor an accountant nor a lawyer. Iโ€™m not a finance professional through formal education. Iโ€™m a person who believes and takes pride in a sense of freedom, satisfaction, fulfillment and empowerment that I get from being financially competent and being conscious managing my personal money. The contents on this blog are for informational and entertainment purposes only and does not constitute financial, accounting, or legal advice. I canโ€™t promise that the information shared on my blog is appropriate for you or anyone else. By reading this blog, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information provided on this blog.

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L R
L R
2 months ago

Buying another tranche of Shell next week. 4.8% dividend after 2/3 cut. What should I say? While TESLA is profitable because it sells emission credits to Ford and GM, Shell is profitable with this dividend and current oil prices. As Marks said: “Rule 1: most things will prove to be cyclical. Rule 2: some of the greatest opportunities for gain and loss come when other people forget rule number 1. 

Dividendlight
Dividendlight
2 months ago

I’m slowly building my Shell position … I think it still has a long road ahead of it. Oil is down, but it won’t disappear any time soon. In the meantime, Shell is working on turning the business around. I think they stand a good chance of succeeding in their endeavours and so I’m willing to risk it.

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