Burton G. Malkiel > 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

“Predicting the stock market is really predicting how other investors will change estimates they are now making with all their best efforts. This means that, for a market forecaster to be right, the consensus of all others must be wrong and the forecaster must determine in which direction-up or down-the market will be moved by changes in the consensus of those same active investors.”
― Burton G. Malkiel, The Elements of Investing

“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

“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 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

“A firm's income statement may be, likened to a bikini-what it reveals is interesting but what it conceals is vital.”
― Burton G. Malkiel

“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

“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

“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 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

“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

“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

“Finding the next Warren Buffett is like looking for a needle in a haystack. We recommend that you buy the haystack instead, in the form of a low-cost index fund.”
― Burton G. Malkiel, The Elements of Investing: Easy Lessons for Every Investor

“Nobody knows more than the market.”
― Burton G. Malkiel, The Elements of Investing: Easy Lessons for Every Investor

“There is one investment truism that, if followed, can dependably increase your investment returns: Minimize your investment costs. We”
― Burton G. Malkiel, The Elements of Investing: Easy Lessons for Every Investor

“You, far more than the market or the economy, are the most important factor in your long-term investment success.”
― Burton G. Malkiel, The Elements of Investing: Easy Lessons for Every Investor

“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

“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

“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

“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 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

“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

“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