William J. Bernstein > Quotes

“The reason that 'guru' is such a popular word is because 'charlatan' is so hard to spell.”
― William J. Bernstein, The Investor's Manifesto: Preparing for Prosperity, Armageddon, and Everything in Between

“Would you believe me if I told you that there’s an investment strategy that a seven-year-old could understand, will take you fifteen minutes of work per year, outperform 90 percent of finance professionals in the long run, and make you a millionaire over time?   Well, it is true, and here it is: Start by saving 15 percent of your salary at age 25 into a 401(k) plan, an IRA, or a taxable account (or all three). Put equal amounts of that 15 percent into just three different mutual funds:   A U.S. total stock market index fund An international total stock market index fund A U.S. total bond market index fund.   Over time, the three funds will grow at different rates, so once per year you’ll adjust their amounts so that they’re again equal. (That’s the fifteen minutes per year, assuming you’ve enrolled in an automatic savings plan.)   That’s it; if you can follow this simple recipe throughout your working career, you will almost certainly beat out most professional investors. More importantly, you’ll likely accumulate enough savings to retire comfortably.”
― William J. Bernstein, If You Can: How Millennials Can Get Rich Slowly

“Although the modern image of the imperial city is dominated by the ruins of the Coliseum and the Forum, the economic life of ancient Rome centered on side streets filled with apartments, shops, and horrea.”
― William J. Bernstein, A Splendid Exchange: How Trade Shaped the World

“The easiest way to get rich is to spend as little as possible.”
― William J. Bernstein, The Four Pillars of Investing: Lessons for Building a Winning Portfolio

“In Battuta's obsession with sharia and the Muslim world and in his lack of interest in nearly everything outside it we clearly see the double-edged sword of Islam so visible in today's world: an ecumenical but self-satisfied faith capable of uniting far-flung peoples under one system of belief and one regime of law, but also severely limited in its capacity to examine and borrow from others.”
― William J Bernstein, A Splendid Exchange: How Trade Shaped the World

“If you find yourself stimulated in any way by your portfolio performance, then you are probably doing something very wrong. A superior portfolio strategy should be intrinsically boring.”
― William J. Bernstein, The Four Pillars of Investing: Lessons for Building a Winning Portfolio

“George Bernard Shaw’s famous spelling of “fish” as “ghoti”—the first two letters pronounced as the last two in “tough,” the middle letter as in “women,” and the last two as in “nation.”
― William J. Bernstein, Masters of the Word: How Media Shaped History from the Alphabet to the Internet

“It’s human nature to find patterns where there are none and to find skill where luck is a more likely explanation.”
― William Bernstein

“The Stoic philosopher and playwright Seneca is said to have owned five hundred tripod tables with ivory legs—no small irony, since he was a vocal critic of the empire's extravagances.”
― William J. Bernstein, A Splendid Exchange: How Trade Shaped the World

“There are only two kinds of investors: those who don’t know where the market is headed, and those who don’t know that they don’t know. Then again, there is a third kind: those who know they don’t know, but whose livelihoods depend on appearing to know.”
― William Bernstein

“Athens, while remaining nominally independent, no longer commanded its lifelines or its fate. Just as it had invented many Western institutions and intellectual and artistic endeavors, so did it pioneer a less glorious tradition. In the centuries following the Peloponnesian war, Athens became the first in a long line of senescent Western empires to suffer the ignominious transformation from world power to open-air theme park, famous only for its arts, its architecture, its schools, and its past.”
― William J. Bernstein, A Splendid Exchange: How Trade Shaped the World

“Only an income-producing possession, such as a stock, bond, or working piece of real estate is a true investment.”
― William J. Bernstein, The Four Pillars of Investing: Lessons for Building a Winning Portfolio

“Manifestly, man is the ape that imitates, tells stories, seeks status, morally condemns others, and yearns for the good old days, all of which guarantee a human future studded with religious and financial mass manias.”
― William J. Bernstein, The Delusions of Crowds: Why People Go Mad in Groups

“That is, we are hardwired to detect relationships where often none exist, a tendency science writer Michael Shermer has labeled “patternicity.”
― William J. Bernstein, The Delusions of Crowds: Why People Go Mad in Groups

“As a general rule, the Chinese seldom ventured west of Sri Lanka, the Indians north of the Red Sea mouth, and the Italians south of Alexandria. It was left to the Greeks, who ranged freely from India to Italy, to carry the greatest share of the traffic.”
― William J Bernstein

“human phenomenon: our species’ preference for “positively skewed outcomes”—ones with low-probability but enormous payoffs, even if the average of all payoffs is negative.”
― William J. Bernstein, The Delusions of Crowds: Why People Go Mad in Groups

“Western notions of individual autonomy and rule of law simply do not apply in the desert. An attack on one tribesman is an attack on all, and in a landscape where a murderer can quickly and quietly slip away, it matters little whether the accused is guilty or innocent. His entire clan is held accountable for thar—retribution. The resulting skein of honor and revenge, so familiar in the modern Middle East, is eternal, seemingly without beginning and without end. When the first recourse of victims is to their cousins, and not to the police or to an independent judicial system, poverty and political instability are the usual outcomes.”
― William J. Bernstein, A Splendid Exchange: How Trade Shaped the World

“Beginning in the eighteenth century, entire nations would seek succor not from God, but rather from Mammon, as a succession of financial mass delusions swept through Europe. On their surfaces, the religious and financial events appear to represent different phenomena, but they were powered by the same social and psychological mechanisms: the irresistible power of narratives; the human proclivity to imagine patterns where there were none; the overweening hubris and overconfidence of both their leaders and followers; and, above all, the overwhelming proclivity of human beings to imitate the behavior of those around them, no matter how factually baseless or self-destructive.”
― William J. Bernstein, The Delusions of Crowds: Why People Go Mad in Groups

“By the fourth millennium BC, the Fertile Crescent was not the only region of coalesced communities; organized agricultural, military, religious, and administrative activity had also begun to appear in the Indus Valley, in what is now Pakistan. Even before written records, there is evidence of trade between these two regions. Archaeologists have discovered lamps and cups in Mesopotamia dating from the late fourth millennium BC and made from conch shells found only in the Indian Ocean and the Gulf of Oman.”
― William J. Bernstein , A Splendid Exchange: How Trade Shaped the World

“Such high interest rates are prohibitive for long-term projects; at 20% per annum, the amount owed doubles in less than four years. With such a crushing future burden, no rational businessman or corporation borrows to fund a project that will not become profitable for five or ten years, as is the case with most large commercial undertakings.”
― William J. Bernstein, The Birth of Plenty: How the Prosperity of the Modern Work Was Create

“As we’ll see, the 4% Roman rate of return is about the same as the aggregate return on capital (when stocks and bonds are considered together) in the U.S. in the twentieth century, and perhaps even a bit more than the aggregate return expected in the next century. (The 4% Roman rate was gold-based, so the return was a real, that is, after-inflation, return.) The”
― William J. Bernstein, The Four Pillars of Investing: Lessons for Building a Winning Portfolio

“Do not trust historical data—especially recent data—to estimate the future returns of stocks and bonds. Instead, rely on interest and dividend payouts and their growth/failure rates.”
― William J. Bernstein, The Investor's Manifesto: Preparing for Prosperity, Armageddon, and Everything in Between

“Whereas theology is the primary driving force behind Christianity and the great Eastern religions, Islam's backbone is a system of law covering all areas of conduct, including commerce. Thus, the new monotheism from Arabia was especially attractive to those engaged in any organized economic activity that flourished wherever rules were plainly visible and vigorously enforced by disinterested parties—again, as in the more secular English common law.”
― William J. Bernstein, A Splendid Exchange: How Trade Shaped the World

“The forces that drove Britain and the United States to control the world's shipping lanes in the nineteenth and twentieth centuries, respectively, first saw light of day in Greece's need to feed itself with imported wheat and barley.”
― William J. Bernstein, A Splendid Exchange: How Trade Shaped the World

“Whoever is lord of Malacca has his hand on the throat of Venice.—Tomé”
― William J. Bernstein, A Splendid Exchange: How Trade Shaped the World

“Within a few decades after the conquests of Cortés and Pizarro, the cattle population of Spanish America doubled as rapidly as every fifteen months. From Mexico to the pampas of Argentina, the vast open spaces of the New World swarmed black with livestock. One French observer in Mexico wrote in wonderment at the "great, level plains, stretching endlessly and everywhere covered with an infinite number of cattle.”
― William J. Bernstein, A Splendid Exchange: How Trade Shaped the World

“century. The most visible legacy of the wealth and splendor generated by the medieval spice trade still dazzles the eye today in Venice, whose grand palazzi and magnificent public architecture were built largely on profits from pepper, cinnamon, nutmeg, mace, and cloves. A hundred pounds of nutmeg, purchased in medieval Alexandria for ten ducats, might easily go for thirty or fifty ducats on the wharves of Venice. Even after payments for shipping, insurance, and customs duties at both ends, profits well in excess of 100 percent were routine; a typical Venetian galley carried one to three hundred tons between Egypt and Italy and earned vast fortunes for the imaginative and the lucky. During the medieval period, a corpulent Croesus was called a “pepper sack,” not a thoroughgoing insult, since the price of a bag of pepper was usually higher than that of a human being.”
― William J. Bernstein, A Splendid Exchange: How Trade Shaped the World

“As populations grow beyond Dunbar’s number, face-to-face contact no longer suffices to maintain political control. At this point, writing supplies the best mechanism for communicating among large numbers of people, and power naturally accrues to the literate. Consequently, societies with high rates of literacy, such as Athens, tend to have more smoothly running republics than those with low rates, such as the late Roman one.”
― William J. Bernstein, Masters of the Word: How Media Shaped History from the Alphabet to the Internet

“Nestorian Christians, expelled for their heresies from the Byzantine Empire but tolerated in the Muslim world as "people of the book," began to arrive from the West via the overland route. It is easy to see how a splinter Christian movement, repelled by the savage intolerance of the Catholic Church and attracted by the relative tolerance of Islam, spread ever eastward.”
― William J. Bernstein, A Splendid Exchange: How Trade Shaped the World

“Dramatic conquests often lead to startling serendipities: the most momentous Muslim acquisition at Talas was not territory or silk, but a commodity at once prosaic and precious. Among the Chinese prisoners taken at Talas were papermakers, who soon spread their wondrous craft into the Islamic world, and then to Europe, changing forever human culture and the course of history.”
― William J. Bernstein, A Splendid Exchange: How Trade Shaped the World