Aaron Nahmad
“Many factors influence a company’s financial results, but the most important ingredient for Watsco’s success is our unique culture. Often underestimated, culture is a powerful driver of performance and results.”
Investment Manager Quotes
Collection
Are you looking to be an expert investment manager?
Would you like to search an aggregated list of wisdom from managers that made a s-tonne of cash?
This a monster collection of investor quotes from investment managers that made it.
Adam Smith
"Good market work, I think, like successful psychiatry, has to work on emotional rapport. You can have no preconceived ideas. There are fundamentals in the marketplace, but the unexplored area is the emotional area."
Adam Smith
"Positive decisions have to be made by an individual; groups can't do it. And I think a lot of the investment business was committee-orientated. "
Adam Smith
"There is no such thing as liquidity of investment for the community as a whole."
Adam Smith
"If you know that the stock doesn't know you own it, you are ahead of the game. You are ahead because you can change your mind and your actions without regard to what you did or thought yesterday."
Adam Smith
"It can be granted right away that if you have been a brilliant decision-maker, over a long enough period of time, maybe that's who you are, and it won't hurt you to walk around feeling brilliant. But it is a dangerous procedure, for the market has a way of inducing humility in even its most successful students."
Adam Smith
“Eighty percent of the market is psychology. Investors whose actions are dominated by their emotions are most likely to get into trouble."
Adam Smith
I am not putting down the study of economics, business cycles, and even security analysis. But knowing them does not guarantee success, and if you haven't a clue about them, there may be hope for you yet.
Adam Smith
"There is one requirement that is absolute in money management, and you have already learned it with the first Irregular Rule: If you don't know who you are, this is an expensive place to find out. The requirement is emotional maturity. In short, you have to be able to handle any situation without losing your cool, or letting your emotions takeover. You must operate without anxiety."
Adam Smith
“When prices go up enough, everybody believes something, even if it is only that everybody else is just about to believe.”
Adam Smith
There is a personality difference between the people who are good at finding stocks and the people who call the shots on timing and manage the whole portfolio. Security analysts dog down information and come up with an idea about what should be bought or sold, but they do not necessarily make good conductors for the whole orchestra. If they are woodwind players to start, they tend to hear the whole orchestra as woodwinds, and it takes another type to keep the woodwinds and brasses and strings in line."
Adam Smith
"There is one other rule you ought to keep in mind and that is to concentrate, and not only in the Zen sense. Sweet are the uses of diversity, but only if you want to end up in the middle of an average."
Adam Smith
"The market is a crowd, and if you've read Gustave Le Bon's 'The Crowd' you know a crowd is a composite personality."
Adam Smith
"One of the most important of the Irregular Rules, find smart people, because if you can do that, you can forget a lot of the other rules."
Adam Smith
“Any company whose earnings are growing consistently or more important, are likely to grow consistently has something unique about it. The competition can read these earnings records too, and fat earnings records are an invitation to come in and sample the cream. So a company that has something unique about it has something the competition cannot latch on to right away. Whatever it is that is unique is a glass wall around those profit margins.”
Adam Smith
Nothing works all the time and in all kinds of markets. That is what is wrong with systems and the books that tell you You Can Make a Million Dollars.
Adam Smith
"Telling a game player that he might make some money in two years is like betting him on how tall the corn will grow and letting him sit on a camp chair in the corn field watching it."
Adam Smith
Books sell with titles like How I Made a Million or You Can Make Millions, with very little content at all. They are the most dangerous things because inevitably there is some mechanical formula somewhere within.
Adam Smith
"A stock is for all practical purposes, a piece of paper that sits in a bank vault. Most likely you will never see it. It may or may not have an intrinsic value; what it is worth on any given day depends on the confluence of buyers and seller on that day. The most important thing to realise is simplistic: The stock doesn't know you own it. All those marvellous things, or those terrible things, that you feel about a stock, or a list of stocks, all these things are unreciprocated by the stock or group of stocks. You can be in love if you want to, but that piece of paper doesn't love you, and unreciprocated love can turn into masochism, narcissism, or, even worse, market losses and unreciprocated hate."
Adam Smith
"We recognise the risks of unconventional investing, but the true test of performance in the handling of money is the record of achievement not the opinion of the respectable.”
Adam Smith
I have been absorbed and immersed since 1924 and I know this is no science. It is an art. Now we have computers and all sorts of statistics but the market is still the same and understanding the market is still no easier. It is personal intuition, sensing patterns of behavior. There is always something unknown, discerned.
Adam Smith
The joys of compounding are there if you keep your stake growing, but all you need have is one year in which you give back half, and your program, at the same growth rate, must stretch out years and years longer.
Adam Smith
The chance of gain is by every man more or less overvalued, and the chance of loss is by most men undervalued.
Adam Smith
"No matter what role the investor has started with, in a climax on one side or the other the role melts into the crowd role of greed or fear. The only real protection against all the vagaries of identity playing, and against the final role of being part of the crowd when it stampedes, is to have an identity so firm it is not influenced by all the brouhaha in the marketplace."
Adam Smith
“Nothing works all the time and in all kinds of markets.”
Adam Smith
"With the good men, you can see the learning juices churning around every mistake. You learn from mistakes. When I look back, my life seems to be an endless chain of mistakes."
Adam Smith
"Emotions are universal and there is no stopping the flow of seasons."
Adam Weiss
"With respect to quality businesses, the key aspects are unit economics, returns on capital, appropriate leverage, free-cash conversion, market share, margin resiliency, moat, long-term growth potential, and management. The motivation for focusing on these types of businesses is that they blow up less frequently, and even if they do blow up, they do so with less severity. High-quality businesses also provide natural tailwinds to returns by virtue of their economics, and their resiliency enables portfolio concentration, which is valuable because it affords the opportunity to perform deep primary research."
Adam Weiss
“If you buy something with a 10% free cash flow yield and hold it for 3 years, management is going to be responsible for allocating a third of the value of the company over that time. You have to really care about that.”
Adam Weiss
"If the CEO owns $1 million worth of stock and gets paid $10 million per year, it’s pretty clear he’ll value his job more than the value of the stock. If he’s paid $1 million per year and owns $50 million in stock, we think that’s predictive of his making better long-term decisions for the company... Where the founder owns 20-30% of the business... they’ll work with Wall Street because they don’t completely control the company, but at the same time they can take a longer-term perspective. CEOs with tons of options rather than actual shares can be prone to adopt Wall Street’s short-term focus, which can cause value to be eroded more quickly than you’d think as one bad decision piles on top of another."
Adam Weiss
"A lot of times when people say someone is a great manager, what they really mean is that the company has done well – in other words, it has a great stock chart. It can be awfully difficult to figure out what caused the good results, the CEO or the general industry conditions. Most of the time a great CEO cannot outrun a lousy business or a tough climate. So while I agree that management matters, you have to be careful that widely acknowledged “great management” doesn’t turn out to simply be a momentum indicator."
Adam Weiss
"For years I’ve literally drawn a curve that says how much I’m willing to lose in the portfolio overall for any given movement in the market. At one end of the curve is a 1929-style event, where I’ve concluded I can accept being down around 30%. At 50%, 40%, 30% downdrafts I want to be down no more than half that level. If the market’s up or down 5%, I’m willing to match the market. Then on the upside the capture ratio starts to tail off. Say the market is up 30%, we can be up 20% and that’s just fine. My job is to deliver on that utility curve, and to beat it if I can."
Adam Weiss
"I had a great martial-arts teacher who said, ‘You can’t pour any water into a cup that’s full.’ Without humility, no learning. If you think you know, you don’t know. Humility is the most important risk-management characteristic."
Adam Weiss
“Value investing, as Bruce Greenwald says, is a big tent. Everyone under the tent, including us, ascribes a range of values to something and wants to buy it as some level of discount to that.”
Adam Weiss
“It comes down to doing business with people you trust. We pay careful attention to all management communications. Does the CEO write the shareholder letter himself or herself? Do they tell you where they’ve been right and where they’ve been wrong? Do they talk about what’s difficult about the business? Do they articulate how they allocate free cash flow, and do so in an owner mentality? Are the key benchmarks consistent? We worry about companies that one year focus you on adjusted net operating EPS, then the next year on EBITDA margin and the next year on something else.”
Adam Weiss
“We’re committed to owning high-quality businesses in industries we understand and can underwrite.”
Adam Weiss
"The real source of competitive advantage in investing is to have a better mental game."
Adam Weiss
"At the position level, we use a risk budget for each position – what’s the most we’re willing to lose on each investment idea. That risk budget, together with hedging instruments, dictates the position size. The sum of the risk budgets on individual positions adds up to the utility curve for the entire portfolio."
Adam Weiss
“Process shouldn’t mean just doing the same thing over and over again because that’s how we’ve always done it. What it means is that we’ve collectively agreed as a research team on a way to proceed, including what we need to know and how we’re going to communicate. You need process to engage collectively in any complex project – done right, it fosters learning and collaboration that results in better decisions.”
Adam Weiss
"There are very few people who have really beaten the market for more than a decade - and I have had the good fortune of knowing a decent percentage of them. My observation is that they all have an uncommon mental game - when things get tough and the chips are down, and most people stop doing what they are supposed to do because of greed or fear, this group manages to avoid the mental fog that plagues the majority."
Adam Weiss
"We're also asking if there are large, unanalyzable forces at work that could nullify the impact of any special insights we might have. This applies to many cyclical and commodity-orientated businesses. Very few people predicted oil prices were going to be cut in half, and this move obliterated the value of any deep insights that energy shareholders may have had on particular companies."
Adam Weiss
"Underlying our investment values is the principle that the mathematics of compounding demands putting a high priority on avoiding substantial permanent losses. That’s why we’re committed to owning high-quality businesses in industries we understand and can underwrite. It’s also why we put the emphasis we do on risk management."
Adam Weiss
"This is a world of very smart people and you can’t enter that marketplace without a profoundly humble view about how you’re going to win."
Adam Weiss
“In areas like basic materials and other commodity businesses, there usually just isn’t enough of a moat, which makes it hard for us to get interested on a fundamental basis.”
Adam Weiss
Underlying our investment values is the principle that the mathematics of compounding demands putting a high priority on avoiding substantial permanent losses. That’s why we’re committed to owning high-quality businesses in industries we understand and can underwrite. It’s also why we put the emphasis we do on risk management.
Albert Einstein
After a certain high level of technical skill is achieved, science and art tend to coalesce in esthetics, plasticity, and form. The great scientists are always artists as well.
Albert Nicholas
We have two principles. The first is : Don't lose money. The second is: Don't forget principle No. 1.
Albert Nicholas
We think if we stick to our philosophy and protect people on the downside, we can produce a pretty good record. The past 40 years has proved that.
Alex Magaro
“Track records can tell you something, but you need a really long history of out-performance to have even a moderate belief. They’re just noisy.”
Alex Magaro
"There must be opportunities if you can construct a platform that will allow you to lean against biases in general. For us, the most important bias was definitely focusing on time preference."
Alex Magaro
We don't have any kind of magic screen.
Alex Roepers
“We don’t use discounted cash flow models. We are more private equity, bottom-up analysts”
Alex Roepers
“We seek adequate liquidity in order to be able to get in, to get out and to properly size positions during the holding period.”
Alex Roepers
"While on the long side we're concentrated with a one or two year time horizon, on the short side we're diversified with a time horizon of two weeks to two months."
Alex Roepers
“We are industrial owner types performing extensive due diligence.”
Alex Roepers
"Concentration of capital is a key ingredient needed to be able to provide superior outperformance. But if you concentrate capital, you need some rules of the road because you have to be careful to avoid any significant losing positions.”
Alex Roepers
"The four letter word that messes up households, governments, and companies is 'debt'. If you can stay away from debt you will be much better off. Of course, there are some situations where it makes sense to take on a reasonable level of debt. For example, a fixed rate mortgage that costs no more than 25% of your income, to buy your first house makes sense. But many of the financial problems in the world have been due to entities taking on way too much debt. The companies that we own, have very manageable debt, if any. I always look closely at the interest costs on the debt related to EBITDA. Our companies must have at least 4X EBITDA as compared with net interest expense, and most have a far greater cushion than that."
Alex Roepers
“It’s very important to understand that when there is a commodity boom or a technology boom it draws the wind out of other market segments.”
Alex Roepers
"Passage of time at a low valuation, assuming reliable cash flows and a durable franchise ranks as an important catalyst. However we look for other catalysts as well, including asset divestitures, smart synergistic acquisitions, share buy-back programs, dividend initiations, analyst upgrades, insider buying, judicious capacity expansion in growth markets and others - the more catalysts the better."
Alex Sacerdote
In this business, it's not about sheer brain power, SAT scores, or an MBA from a leading business school. Those factors help and of course are nice to have, but they do not guarantee success by any stretch.
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