A Random Walk Down Wall Street Quotes

“Never buy anything from someone who is out of breath.”
― Burton G. Malkiel, A Random Walk Down Wall Street

“put time on your side. Start saving early and save regularly. Live modestly and don't touch the money that's been set aside.”
― Burton G. Malkiel, A Random Walk Down Wall Street

“It is not hard to make money in the market. What is hard to avoid is the alluring temptation to throw your money away on short, get-rich-quick speculative binges. It is an obvious lesson, but one frequently ignored.”
― Burton G. Malkiel, A Random Walk Down Wall Street

“A couple, both age seventy-eight, went to a sex therapist’s office. The doctor asked, “What can I do for you?” The man said, “Will you watch us have sexual intercourse?” The doctor looked puzzled, but agreed. When the couple finished, the doctor said, “There’s nothing wrong with the way you have intercourse,” and charged them $50. The couple asked for another appointment and returned once a week for several weeks. They would have intercourse, pay the doctor, then leave. Finally, the doctor asked, “Just exactly what are you trying to find out?” The old man said, “We’re not trying to find out anything. She’s married and we can’t go to her house. I’m married and we can’t go to my house. The Holiday Inn charges $93 and the Hilton Inn charges $108. We do it here for $50, and I get $43 back from Medicare.”
― Burton G. Malkiel, A Random Walk Down Wall Street

“I view investing as a method of purchasing assets to gain profit in the form of reasonably predictable income (dividends, interest, or rentals) and /or appreciation over the long term.”
― Burton G. Malkiel, A Random Walk Down Wall Street

“The greatest of all gifts is the power to estimate
things at their true worth.”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

“there are four factors that create irrational market behavior: overconfidence, biased judgments, herd mentality, and loss aversion.”
― Burton G. Malkiel, A Random Walk Down Wall Street

“Res tantum valet quantum vendi potest. (A thing is worth only what someone else will pay for it.)”
― Burton Gordon Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

“Tip of the Week If you bought $1,000 worth of Nortel stock one year ago, it would now be worth $49. If you bought $1,000 worth of Budweiser (the beer, not the stock) one year ago, drank all the beer, and traded in the cans for the nickel deposit, you would have $79. My advice to you…start drinking heavily.”
― Burton G. Malkiel, A Random Walk Down Wall Street

“There is nothing so disturbing to one’s well-being and judgment as to see a friend get rich.”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

“Two-thirds of professionally managed funds are regularly outperformed by a broad capitalization-weighted index fund with equivalent risk, and those that do appear to produce excess returns in one period are not likely to do so in the next. The record of professionals does not suggest that sufficient predictability exists in the stock market to produce exploitable arbitrage opportunities.”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

“Look for growth situations with low price-earnings multiples. If the growth takes place, there’s often a double bonus—both the earnings and the multiple rise, producing large gains. Beware of very high multiple stocks in which future growth is already discounted. If growth doesn’t materialize, losses are doubly heavy—both the earnings and the multiples drop.”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

“In crowds it is stupidity and not mother-wit that is accumulated,” Gustave Le Bon noted in his 1895 classic on crowd psychology.”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

“J. P. Morgan once had a friend who was so worried about his stock holdings that he could not sleep at night. The friend asked, “What should I do about my stocks?” Morgan replied, “Sell down to the sleeping point.”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

“In fact, the most profitable investments you will ever make are precisely at the times when pessimism is the most rampant.”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Best Investment Guide That Money Can Buy

“For many of us, trying to outguess the market is a game that is much too much fun to give up. Even if you were convinced you would not do any better than average, I'm sure that most of you with speculative temperaments would still want to keep on playing the game of selecting individual stocks with at least some portion of the money you invest.”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

“You will never be allowed to buy the really good IPOs at the initial offering price. The hot IPOs are snapped up by the big institutional investors or the very best wealthy clients of the underwriting firm.”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

“Kahneman and Tversky concluded that losses were 2½ times as undesirable as equivalent gains were desirable. In other words, a dollar loss is 2½ times as painful as a dollar gain is pleasurable. People exhibit extreme loss aversion, even though a change of $100 of wealth would hardly be noticed for most people with substantial assets. We’ll see later how loss aversion leads many investors to make costly mistakes.”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

“The index performance is not mediocre—it exceeds the results achieved by the typical active manager.”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

“Forecasts are difficult to make—particularly those about the future.”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

“WHAT DOES IT ALL MEAN? The lessons of market history are clear. Styles and fashions in investors’ evaluations of securities can and often do play a critical role in the pricing of securities. The stock market at times conforms well to the castle-in-the-air theory. For this reason, the game of investing can be extremely dangerous. Another lesson that cries out for attention is that investors should be very wary of purchasing today’s hot “new issue.” Most initial public offerings underperform the stock market as a whole. And if you buy the new issue after it begins trading, usually at a higher price, you are even more certain to lose. Investors would be well advised to treat new issues with a healthy dose of skepticism. Certainly investors in the past have built many castles in the air with IPOs. Remember that the major sellers of the stock of IPOs are the managers of the companies themselves. They try to time their sales to coincide with a peak in the prosperity of their companies or with the height of investor enthusiasm for some current fad. In such cases, the urge to get on the bandwagon—even in high-growth industries—produced a profitless prosperity for investors.”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

“It is the definition of the time period for the investment return and the predictability of the returns that often distinguish an investment from a speculation. A speculator buys stocks hoping for a short-term gain over the next days or weeks. An investor buys stocks likely to produce a dependable future stream of cash returns and capital gains when measured over years or decades.”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

“In the 1990s, the ratio of buy to sell recommendations climbed to 100 to 1, particularly for brokerage firms with large investment banking businesses.”
― Burton G. Malkiel, A Random Walk Down Wall Street

“Daniel Kahneman has argued that this tendency to overconfidence is particularly strong among investors. More than most other groups, investors tend to exaggerate their own skill and deny the role of chance. They overestimate their own knowledge, underestimate the risks involved, and exaggerate their ability to control events.”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

“as the public realized that an excess of paper currency creates no real wealth, only inflation.”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

“The harsh truth is that the most important driver in the growth of your assets is how much you save, and saving requires discipline. Without a regular savings program, it doesn’t matter if you make 5 percent, 10 percent, or even 15 percent on your investment funds. The single most important thing you can do to achieve financial security is to begin a regular savings program and to start it as early as possible. The only reliable route to a comfortable retirement is to build up a nest egg slowly and steadily. Yet few people follow this basic rule, and the savings of the typical American family are woefully inadequate. It is critically important to start saving now. Every year you put off investing makes your ultimate retirement goals more difficult to achieve. Trust in time rather than in timing. As a sign in the window of a bank put it, little by little you can safely stock up a strong reserve here, but not until you start.”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

“And if you buy the new issue after it begins trading, usually at a higher price, you are even more certain to lose.”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

“A stock selling at $100 per share with earnings of $10 per share would have the same P/E multiple (10) as a stock selling at $40 with earnings of $4 per share. It is the P/E multiple, not the price, that really tells you how a stock is valued in the market.”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

“As the economic historian Charles Kindleberger has stated, “There is nothing so disturbing to one’s well-being and judgment as to see a friend get rich.”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

“October. This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August and February. —Mark Twain, Pudd’nhead Wilson”
― Burton G. Malkiel, A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing