A Quote by Joel Greenblatt
It just seems logical that sticking to investing in only a small number of companies that you understand well, rather than moving down the list to your thirtieth or fiftieth favorite pick, would create a much greater potential to earn above-average investment returns.
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It is the thirtieth of May, the thirtieth of November, a beginning or an end, we are moving into the solstice and there is so much here I still do not understand.
When people who earn more than the average have their 'surplus', or the greater part of it, seized from them in taxes, and when people who earn less than average have the deficiency , or the greater part of it, turned over to them in hand-outs and doles, the production of all must sharply decline; for the energetic and able who lose their incentive to produce more than the average, and the slothful and unskilled lose their incentive to improve their condition.
People actually aren't moving on from companies much more quickly than in the past, but there's a perception that they do, so companies are investing less in talent on the assumption that young employees won't stay long.
I'm not here to tell you what your average needs to be, but it would seem to me that one way to protect yourself, as an entrepreneur, from the dreaded average is to understand what that looks like in your industry, your business, and your personal life and take the steps to be above average.
There are a few investment managers, of course, who are very good - though in the short run, it's difficult to determine whether a great record is due to luck or talent. Most advisors, however, are far better at generating high fees than they are at generating high returns. In truth, their core competence is salesmanship. Rather than listen to their siren songs, investors - large and small - should instead read Jack Bogle's The Little Book of Common Sense Investing.
Targeting investment returns leads investors to focus on potential upside rather on downside risk ... rather than targeting a desired rate of return, even an eminently reasonable one, investors should target risk.
The returns from investing in poor people are just as great as the returns from investing in the business world... and have even more meaning
Demanding immediate success invariably leads to playing the fads or fashions currently performing well rather than investing on a solid basis. A course of investment, once charted, should be given time to work out. Patience is a crucial but rare investment commodity.
The average girl would rather have beauty than brains because she knows the average man can see much better than he can think- Ladies' Home JournalI'd rather have two girls at seventeen than one at thirty-four
Hedge funds try to produce above-average investment returns using tactics ranging from traditional stock-picking to complex derivative and arbitrage plays. High minimum investments, redemption restrictions and aggressive strategies make them suitable mainly for more sophisticated and well-heeled investors.
The risk of an investment is described by both the probability and the potential amount of loss. The risk of an investment-the probability of an adverse outcome-is partly inherent in its very nature. A dollar spent on biotechnology research is a riskier investment than a dollar used to purchase utility equipment. The former has both a greater probability of loss and a greater percentage of the investment at stake.
It comforts me to think that if we are created beings, the thing that created us would have to be greater than us, so much greater, in fact, that we would not be able to understand it. It would have to be greater than the facts of our reality, and so it would seem to us, looking out from within our reality that it would contradict reason. But reason itself would suggest it would have to be greater than reality, or it would not be reasonable.
Below, we itemize some of the quite different lessons investors seem to have learned as of late 2009 - false lessons, we believe. To not only learn but also effectively implement investment lessons requires a disciplined, often contrary, and long-term-oriented investment approach. It requires a resolute focus on risk aversion rather than maximizing immediate returns, as well as an understanding of history, a sense of financial market cycles, and, at times, extraordinary patience.
What you pay for an investment is the single biggest determinant for how successful that investment will be. When equity prices are high, your returns will be lower. When they are cheap, your returns will be higher.
Winning would create greater potential for change than talk alone.
The Berkshire-style investors tend to be less diversified than other people. The academics have done a terrible disservice to intelligent investors by glorifying the idea of diversification. Because I just think the whole concept is literally almost insane. It emphasizes feeling good about not having your investment results depart very much from average investment results. But why would you get on the bandwagon like that if somebody didn't make you with a whip and a gun?
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