It's got to be the best intellectual exercise out there. You're seeing through new situations every ten minutes. In the stock market you don't base your decisions on what the market is doing, but on what you think is rational. Bridge is about weighing gain/loss ratios. You're doing calculations all the time.
People who watch their weight, golf scores, and fuel bills seem to shun quantitative evaluation of their investment management skills although it involves the most important client in the world-themselves.
The approach and strategies are very similar in that you gather all the information you can and then keep adding to that base of information as things develop. You do whatever the probabilities indicated based on the knowledge that you have at that time, but you are always willing to modify your behaviour or your approach as you get new information. In bridge, you behave in a way that gets the best from your partner. And in business, you behave in the way that gets the best from your managers and your employees.
Like most trends, at the beginning it's driven by fundamentals, at some point speculation takes over. What the wise man does in the beginning, the fool does in the end.
Never give up searching for the job that you’re passionate about. Try to find the job you’d have if you were independently rich. Forget about the pay. When you’re associating with the people that you love, doing what you love, it doesn’t get any better than that.
Investors have to remember: corporate profits are going up, but stocks are going up faster. How can that continue indefinitely? Investors can only earn what companies themselves can earn; the government or the markets themselves don't kick anything in. How can you get anything more out of a farm than what it grows?
A low-cost index fund is the most sensible equity investment for the great majority of investors. My mentor, Ben Graham, took this position many years ago, and everything I have seen since convinces me of its truth.
I don't know that I could draw one that's perfect. But I'd rather by approximately right than precisely wrong, and it would be precisely wrong to turn it down.
I would say that an RFC-like thing might make sense. I probably would do it myself. But I don't think trying to combine that with what's going through now, I think what is needed now is liquidity.
Managers thinking about accounting issues should never forget one of Abraham Lincoln's favorite riddles: How many legs does a dog have, if you call a tail a leg? The answer: Four, because calling a tail a leg doesn't make it a leg.
Investors making purchases in an overheated market need to recognize that it may often take an extended period for the value of even an outstanding company to catch up with the price they paid.