Quotes 8

Trying to sell an illiquid stock in a down market brings to mind the galley slaves in Ben-Hur, chained to their bench while the ship sinks. - Ralph Wanger

When people ask how we've managed to get our results [at Acorn], I tell them it's not by avoiding disasters, because I have had my fair share of them. That's understood with small cap investing. But if you manage to own some stocks that go up ten times, that pays for a lot of disasters, with profits left over. - Ralph Wanger

You can't make five or ten or twenty times your money if you don't hold on to stocks. Most people are delighted when a stock doubles, and quickly sell to lock in their gain. If a company is still performing, let its stock, too, continue to perform. - Ralph Wanger

Value stocks have another attraction: they are constantly in fresh production. A new batch often appears when the troubles of a few leaders taint a whole industry. - Ralph Wanger

Deciding on an investment philosophy is kind of like picking a spouse. Do you want someone who is volatile and romantic and emotional, or do you want someone who is steady and trustworthy and down to earth. If you want a successful investment career, you'd better bind yourself to a style you can live with. - Ralph Wanger

The growth of a middle class in developing countries is a very simple - but powerful - way to think about the future. First the newly well-off want bicycles, then motorcycles, and five years from now, automobiles. - Ralph Wanger

Since the Industrial Revolution began, going downstream - investing in businesses that will benefit from new technology rather than investing in the technology companies themselves - has often been the smarter strategy. - Ralph Wanger

The best assurance of continued growth, and high profit margins, comes back to this: the company should have a special niche in the marketplace, so that sales don't depend on offering a commodity item at a lower price than the competition's. It should, to a degree, dominate that niche. The best company in a marginal industry is worth more than the third-best company in a major industry. I'd rather own the shares of Hokuto, the leading mushroom grower in Japan, than of Mitsubishi Motor or Subaru. - Ralph Wanger

Glamour has nothing to do with a niche's appeal. A dull business run by a good businessman is far better than a glamorous business with mediocre management. And even if the glamorous business is run by a genius, often, in that kind of industry, its competitors are also geniuses, so nobody has an advantage, as I've commented about high-tech companies. - Ralph Wanger

Good management to Wall Street means nothing more than a company with three consecutive quarters of rising earnings. Make it four quarters and you have great management. But exciting performance numbers by themselves aren't enough to qualify managers as superior, at least not in my book. One good year or two could be a fluke. Or maybe current management's predecessors set operations up so well that the incumbents haven't had time to wreck everything. - Ralph Wanger

Managements can be guarded, especially if they know we [Acorn fund] own a lot of their stock. But their competitors will usually talk freely about them. It's like trying to find out about a young lady you are interested in. If you ask her mother, you are certainly going to get a different perspective than you would if you asked the boyfriend she has broke up with. We like to hear what the boyfriend has to say. - Ralph Wanger

Without doubt, the most striking feature of the financial era which ended in the Autumn of 1929 was the desire of people to buy securities, and the effect of this on values. But the increase in the number of securities to buy was hardly less striking. And the ingenuity and zeal with which companies were devised in which securities might be sold was as remarkable as anything. - John K. Galbraith

A banker need not be popular. Indeed, a good banker in a healthy capitalist society should probably be much disliked. - John K. Galbraith

No mutual fund manager who relies on market timing has kept his job for fifteen years. Individual investors who try to time the market will be tossed on the same horns. - Ralph Wanger

Nasty bear markets happen every six and a half years. Smaller declines of 10 per cent, called 'corrections', happen every two years or so. Taken together, these minor and major setbacks have produced losses in thirty-three years out of the past one hundred, making investors unhappy roughly one-third of the time. - John Rothchild

It's no accident that the largest investment house in the world, Merrill Lynch, has a bull for a mascot, and took 'Bullish on America' for its corporate motto. No investment house has dared adopt the slogan 'Bearish on America', even during market declines when it might bring in extra business. - John Rothchild

There are few if any chronic bears, as pessimists have a hard time making a living in America. - John Rothchild

Statistics are like prisoners under torture: with the proper tweaking you can get them to confess to anything. - John Rothchild

Buying and holding is far from the sure thing it's made out to be. It works in bull markets. It works if you invest regularly, in dribs and drabs, catching the ups and downs along the way. It works in mild bear markets, when the decline are quickly reversed. It may work if you've got twenty years to wait for stock to recover from a half-off sale. Otherwise, it's risky. It's very risky when you're holding stocks you bought at extravagant prices. It's extremely risky when your retirement depends on a positive result and you're planning to take up golf in a decade or less. - John Rothchild

An investor in a panicky market faces the same predicament as a moviegoer in a crowded theater after somebody shouts 'Fire!' Staying put is the sensible thing to do, as long as everybody else stays put and stays calm. Otherwise, people who stay put run the risk of getting trampled, and people who rush to the exit may have the best chance of escape. - John Rothchild

Bear markets happen for a simple reason. The owners of the merchandise can't get their asking price. The shortage of buyers forces them to lower the fare, until a buyer can be coaxed into making a deal. It's a common occurrence in retail. Stores have a bear market after every Christmas rush. - John Rothchild

That stocks rise and fall on corporate earnings is a much ballyhooed misconception. The price investors will pay for earnings varies from hour to hour, week to week, year to year depending on the inclinations of the buyers and the sellers. - John Rothchild

Outperform your peers in a bull market and you'll be applauded for your skill. Look at Warren Buffett - his popularity grows with his billions. Outperform your peers in a bear market - by turning a profit when they're nursing losses - and check your backside for darts, your rose bushes for poison, and your driveway for nails. On Wall Street a winning bear gets more cold shoulder than an SEC gumshoe. - John Rothchild

Just because a certain asset is out of favor at the moment doesn't guarantee it will turn a profit anytime soon. Gold has been so unpopular for so long it was the star attraction at contrarian conferences dating back to the mid 1980s, when a fervent gold bug lost control of himself, jumped on a chair an hollered ''gold! gold! gold!. At some point gold became so widely ostracised even gold bugs wouldn't buy it. There wasn't a better contrarian play on the planet unless it was mad cow patties and still the price of gold didn't rise.' - John Rothchild

The 1973-1974 collapse, brought the capitalization of the British market down to a mere $50 billion. This was less than the yearly profits of the OPEC oil-producing nations, whose increase in oil prices contributed to the decline in share values. The OPEC nations could have purchased a controlling interest in every publicly traded British corporation at the time with less than one year's oil revenues! - Jeremy Siegel

If Fed Chairman Alan Greenspan were to whisper to me what his monetary policy was going to be over the next two years, it wouldn't change one thing I do. - Warren Buffett

The thing that most affects the stock market is everything. - James Palysted Wood

How can institutional investors hope to outperform the market when, in effect, they are the market? - Charles Ellis

The long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us when the storm is long past, the ocean will be flat. - John Maynard Keynes in 'A Tract on Monetary Reform', 1924

If you can't control your emotions, being in the market is like walking into a heated area wearing a backpack full of explosives. - Charles Ellis