Bits & pieces 8 July 2016

Lessons learnt Part 4. A lot has been learnt by market pundits since what is widely
acknowledged as being the worlds first stock exchange commenced business in 1602 in
Amsterdam. This week Ive aggregated the thoughts, rules and principles of a number of
the worlds most decorated investors and traders (and some bloggers) this is the fourth
batch of lessons Ive compiled in recent years. Links to the three previous editions are on
page 2. As you might expect there are numerous divergences in the views of these financial
practitioners but there are also more than a few overlaps. Some have been highlighted in
previous editions but return in this one with additional lessons. Hopefully you will find a
couple of extra financial mantras to work by as I once again did.

Capitalism without failure is not capitalism at all, but a kind of socialism for the rich. James Grant

Some people get rich studying artificial intelligence. Me, I make my money studying natural stupidity.
Carl Icahn

Prices fluctuate more than valuesso therein lies opportunity. Why do the prices fluctuate so widely
when values cant possibly? I will tell you the answer I have come up with: The answer is I dont know
and I dont care. We could waste a lot of time about psychology but it always happens and it continues to
happen. I just want to take advantage of it. We could sit there and figure it all out, but I like to keep it
simple. It happens; it continues to happen; the opportunities are there .. Remember, its the quality of
your ideas not the quantity that will result in the big money .. Choosing individual stocks without any
idea of what youre looking for is like running through a dynamite factory with a burning match. You may
live, but youre still an idiot. Joel Greenblatt

The intelligent investor is a realist who sells to optimists and buys from pessimists .. Mr Markets job is
to provide you with prices; your job is to decide whether it is to your advantage to act on them. You do
not have to trade with him just because he constantly begs you to. Benjamin Graham

Investing is a popularity contest, and the most dangerous thing is to buy something at the peak of its
popularity. Howard Marks

Ick investing means taking a special analytical interest in stocks that inspire a first reaction of ick. I
become interested in stocks that by their very names or circumstances inspire unwillingness and an ick
accompanied by a wrinkle of the nose on the part of most investors to delve any further. Michael Burry

A great investment opportunity occurs when a marvellous business encounters a one-time huge, but
solvable problem. Warren Buffett

You never know what the American public is going to do, but you know that they will do it all at once.
Bill Siedmen

History doesnt crawl; it leaps. Nassim Taleb

Markets are constantly in a state of uncertainty and flux, and money is made by discounting the obvious
and betting on the unexpected .. Im only rich because I know when Im wrong .. I basically have
survived by recognizing my mistakes. George Soros

A price drop in a good stock is only a tragedy if you sell at that price and never buy more. To me, a price
drop is an opportunity to load up on bargains from among your worst performers and your laggards that
show promise. If you can't convince yourself 'When I'm down 25 percent, I'm a buyer' and banish forever
the fatal thought 'When I'm down 25 percent, I'm a seller,' then you'll never make a decent profit in
stocks. Peter Lynch

One of the best rules anybody can learn about investing is to do nothing, absolutely nothing, unless
there is something to do. I just wait until there is money lying in the corner, and all I have to do is go
over there and pick it up .. a situation that is like the proverbial shooting fish in a barrel. Jim Rogers

Most investors are primarily oriented toward return, how much they can make and pay little attention to
risk, how much they can lose. Seth Klarman

Plus
Last Word: Top new Chuck Norris facts

Damian Kestel Australian mobile: (+61) 401 362629 damian.kestel@clsa.com

 Lessons learnt - Part 4
A lot has been learnt by market pundits since what is widely acknowledged as being the world's
first stock exchange commenced business in 1602 in Amsterdam. This week- I've aggregated the
thoughts, rules and principles of a number of the world's most decorated investors and traders
(and some bloggers)

As you might expect there are numerous divergences in the views of these financial practitioners
but there are also more than a few overlaps in how they approach investing. Hopefully you will find

l
a couple of additional financial mantras to work by as I once again did.

L17!. srAAr W/111

James Grant thinking

Capitalism without financial failure is not capitalism at all, but a kind of socialism for the rich.
To suppose that the value of a common stock is determined purely by a corporation's earnings
discounted by the relevant interest rates and adjusted for the marginal tax rate is to forget that people
have burned witches. gone to war on a whim. risen to the defense of Joseph Stalin and believed Orson
Welles when he told them over the radio that the Martians had landed. HA
The art of banking is always to balance the risk of a run with the reward of a profit. The tantalizing factor
in the equation is that riskier borrowers pay higher interest rates. Ultimate safety - a strongbox full of
currency - would avail the banker nothing. Maximum risk - a portfolio of loans to prospective bankrupts
at usurious interest rates- would invite disaster. A good banker safely and profitably treads the middle
ground.
Central banks have gotten out of the central banking business and into the central planning business,
meaning that they are devoted to raising up-if they can-economic growth and employment through the
dubious means of suppressing interest rates and printing money. The nice thing about gold is that you
can't print it.
Growth at an exceptional rate is a red flag in banking. It is hard enough to manage an ordinary
bank; to control a sprouting weed is well-nigh impossible. If loans are expanding too quickly, the lending
officers have probably been saying 'yes' too frequently.
Credit is money of the mind.
Every debt is ultimately paid, if not by the debtor, then eventually by the creditor.
In general, markets know more than the people who write about them.
In almost every walk of life, people buy more at lower prices; in the stock market they seem to buy
more at higher prices.
Hope sustains life, but misplaced hope prolongs recessions.
The Fed can change how things look, not how things are
Successful investing is about having people agree with you ..([a! eD
I believe that there is an important kernel of truth in the idea that financial errors recur every other
generation.
The first bad bank loan was no doubt made around the time of the opening of the first bank.
It is an axiom nowadays that no bank fails for lack of capital; unprofitable lending is always the
underlying cause.
Progress is cumulative in science and engineering, but cyclical in finance.
Nothing beats a little cash in a bear market, of course, and the oldest form of cash is gold.
To me the gold price takes the form of a very uncomplicated formula, and all you have to do is divide
one by 'n.' And 'n', I'm glad you ask, 'n' is the world's trust in the institution of paper money and in the
capacity of people like Ben Bernanke to manage it. So the smaller 'n', the bigger the price. One divided
by a receding number is the definition of a bull market.
 Dr. Michael Burry on Investing
Dr. Michael Burry is the founder of Scion Capital. He was recently made famous with the general public
as a character in the movie adaptation of Michael Lewis' book The Big Short, but even before then he was
famous in investing circles for his astute investing during times like the financial crisis of 2007. He is a
physician by training and has diagnosed himself as having Asperger's Syndrome. Burry is particularly
interesting for investors in that he has adapted value investing principles to his personality, skills and
nature. BUNDLE THEM UP

~~ SELL THE DEBT

~
"My weapon of choice as a stock picker is research; it's critical for me to understand a company's value
before laying down a dime. I really had no choice in this matter, for when I first happened upon the writings
of Benjamin Graham, I felt as if I was born to play the role of value investor." "Investors in the habit of
overturning the most stones will find the most success." "The late 90s almost forced me to identify myself
as a value investor, because I thought what everybody else was doing was insane."

"All my stock picking is 100% based on the concept of a margin of safety, as introduced to the world in the
book "Security Analysis," which Graham co-authored with David Dodd. By now I have my own version of
their techniques, but the net is that I want to protect my downside to prevent permanent loss of capital.
Specific, known catalysts are not necessary. Sheer, outrageous value is enough." "My firm opinion is that
the best hedge is buying an appropriately safe and cheap stock." "It is a tenet of my investment style that, on
the subject of common stock investment, maximizing the upside means first and foremost minimizing the
downside." "Lost dollars are simply harder to replace than gained dollars are to lose"

C) "I try to buy shares of unpopular companies when they look like road kill, and sell them when they've
been polished up a bit." "Fully aware that wonderful businesses make wonderful investments only at
wonderful prices, I will continue to seek out the bargains amid the refuse."
"If you are going to be a great investor, you have to fit the style to who you are. At one point I recognized
that Warren Buffett, though he had every advantage in learning from Ben Graham, did not copy Ben
Graham, but rather set out on his own path, and ran money his way, by his own rules .... I also immediately
internalized the idea that no school could teach someone how to be a great investor. If it were true, it'd be
the most popular school in the world, with an impossibly high tuition. So it must not be true." "lck
investing means taking a special analytical interest in stocks that inspire a first reaction of 'ick.' I tend
to become interested in stocks that by their very names or circumstances inspire unwillingness - and
an 'ick' accompanied by a wrinkle of the nose on the part of most investors to delve any further.

"I prefer to look at specific investments within the inefficient parts of the market." "The bulk of
opportunities remain in undervalued, smaller, more illiquid situations that often represent average or
slightly above-average businesses." "In essence, the stock market represents three separate categories of
business. They are, adjusted for inflation, those with shrinking intrinsic value, those with approximately
stable intrinsic value, and those with steadily growing intrinsic value. The preference, always, would be to
buy a long-term franchise at a substantial discount from growing intrinsic value."
~AI? Ul~lJ! -roo
"How do I determine the discount? I usually focus on free cash flow and enterprise value (market
capitalization less cash plus debt). I will screen through large numbers of companies by looking at the
enterprise value/EBITDA ratio, though the ratio I am willing to accept tends to vary with the industry and
its position in the economic cycle. If a stock passes this loose screen, I'll then look harder to determine a
more specific price and value for the company. I also invest in rare birds- asset plays and, to a lesser
extent, arbitrage opportunities and companies selling at less than two-thirds of net value (net working capital
less liabilities). I'll happily mix in the types of companies favored by Warren Buffett- those with a
sustainable competitive advantage, as demonstrated by longstanding and stable high returns on invested
capital- if they become available at good prices."
 '' r IYIA~E my /VIOIIIEY
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SrUb"/IN6 NAroMt... SrUPIJJITY

Carl Icahn about Investing
1. "Some people get rich studying artificial intelligence. Me, I make my money studying natural
stupidity. I sit on a lot of boards ... I don't have to watch Saturday Night Live anymore, I just sit at the
board meetings."

2. "If the system wasn't so messed up, guys like me wouldn't make this kind of money."

3. "I look at companies as businesses, while Wall Street analysts look for quarterly earnings
performance."

4. "I buy assets and potential productivity."

5. "In life and business, there are two cardinal sins, the first is to act precipitously without thought, and
the second is to not act at all."

6. "The cardinal rule is to have enough capital at the end of the day." "In takeovers, the metaphor is
war. The secret is reserves. You must have reserves stretched way out ahead. You have to know that
you could buy the company and not be stretched."

7. "I made an awful lot of money not having plans. Ask a running back 'what was your plan when you
saw three guys coming at you?' He doesn't say, 'well Jesus I had a plan.' These things have a life of
their own."

8. "The consensus thinking is generally wrong. If you go with a trend, the momentum always falls apart
on you. So I buy companies that are not glamorous and usually out of favor. It is even better if the
whole industry is out of favor."

9. "I will tell you, at the risk of being immodest, that we have one of the best records around over the
last decade, over the last year. I will tell you this: I've learned one thing: Don't micromanage. Don't go
in and tell somebody else how to run their business. I look at it from the big picture: We go into
companies and we tell them how to run their finances, we tell them how to buy pencils instead of buying
from their cousin Vinnie, for example. But we don't tell them what to do in this situation."

10. "Ideas comes to you ... not necessarily working and sitting at a desk."

11. "I enjoy the hunt much more than the 'good life' after the victory."

12. "In the takeover business, if you want a friend, you buy a dog."

"J:'m glad you've learned a valuable lesson,

but that's not suitable collater "
 A Dozen Things I've Learned from Joel Greenblatt
about Value Investing Posted by trengriffin
Joel Greenblatt is a successful value investor and the founder of Gotham Capital. He has written several books on
value investing identified in the notes below.
Ml: IYJA!l.I<IEr
"One of the greatest stock market writers and thinkers, Benjamin Graham, put it this way. Imagine that you are partners in the
ownership of a business with a crazy guy named Mr. Market. Mr. Market is subject to wild mood swings. Each day he offers to
buy your share of the business or sell you his share of the business at a particular price. Mr. Market always leaves the decision
completely to you, and every day you have three choices. You can sell your shares to Mr. Market at his stated price, you can buy
Mr. Market's shares at that same price, or you can do nothing.

Sometimes Mr. Market is in such a good mood that he names a price that is much higher than the true worth of the business. On
those days, it would probably make sense for you to sell Mr. Market your share of the business. On other days, he is in such a
poor mood that he names a very low price for the business. On those days, you might want to take advantage of Mr. Market's
crazy offer to sell you shares at such a low price and to buy Mr. Market's share of the business. If the price named by Mr.
Market is neither very high nor extraordinarily low relative to the value of the business, you might very logically choose to do

@
-
nothing."

"Prices fluctuate more than values-so therein lies opportunity. Why do the prices fluctuate so widely when values can't
possibly? I will tell you the answer I have come up with: The answer is I don't know and I don't care. We could waste a
lot of time about psychology but it always happens and it continues to happen. I just want to take advantage of it. We
could sit there and figure it all out, but I like to keep it simple. It happens; it continues to happen; the opportunities are
there.

I just want to take advantage of prices away from value .. If you do good valuation work and you are right, Mr. Market will pay
you back. In the short term, one to two years, the market is inefficient. But in the long-term, the market has to get it right-it
will pay you back in two to three years. Keep that in mind when you do your analysis. You don't have to look at the next -
quarter, the next six months, if you do good valuation work-.. Mr. Market will pay you."

"Look down, not up, when making your initial investment decision. If you don't lose money, most of the remaining alternatives
are good ones."

"We use EBIT-earnings before interest and taxes-and we compare that to enterprise value, which is the market value of a
company's stock plus the long-term debt that a company has. That adjusts for companies that have different ratios of leverage,
different tax rates, all those things. But the concept is still the same. We want to get more earnings for the price we're paying.
That was sort of the principles that Benjamin Graham taught, meaning that cheap is good. If you buy cheap, you leave yourself a
large margin of safety. Warren Buffett had a twist on that and said, 'Gee, it's nice to buy cheap things but I also like to buy good
businesses.'

So if I could buy good businesses at a cheap price, it's better than just cheap ... We rank all companies based on their return
on capital and we also rank all companies based on how cheaply we can buy them relative to their earnings. The more
earnings, the better. Then we combine those rankings. And the companies that have the best combination of that ranking go
to the top. So we're not looking for the cheapest company. We're not looking for the highest return-on-capital company. We're
looking for the companies that have the best combinations of those two attributes."

"'Choosing individual stocks without any idea of what you're looking for is like running through a dynamite factory witM
l a burning match. You may live, but you're still an idiot." J
"Most people don't (and shouldn't) invest by buying stocks and holding them for only one month. Besides the huge amount of
time, transaction costs, and tax expenses involved, this is essentially a trading strategy, not really a practical long-term
investment strategy."

"Over the long term, despite significant drops from time to time, stocks (especially an intelligently selected stock portfolio) will
be one of your best investment options. The trick is to GET to the long term. Think in terms of 5 years, I 0 years and longer.
Do your planning and asset allocation ahead of time. Choose a portion of your assets to invest in the stock market- and stick
with it! Yes, the bad times will come, but over the truly long term, the good times will win out- and I hope the lessons from
2008 will help get you there to enjoy them."

'Companies that achieve a high return on capital are likely to have a special advantage of some kind. That special advantage
keeps competitors from destroying the ability to earn above-average profits." . CON1<!J :./
"You have to know what you know-Your Circle of Competence."

"Remember, it's the quality of your ideas not the quantity that will result in the big money."

"There is no sense diluting your best ideas or favorite situations by continuing to work your way down a list of attractive
opportunities."

"Even finding one good opportunity a month is far more than you should need or want."

"If you are going to be a very concentrated investor, you should not use leverage. You can't leverage because you need to live
through the downturns and that is incredibly important."

"The odds of anyone calling you on the phone with good investment advice are about the same as winning the Lotto without
buying a ticket."

"Almost everyone should have a significant portion of their assets in stocks. But here it comes- few people should put ALL
their money in stocks. Whether you choose to place 90% of your assets or 40% of your assets in stocks should be based largely
on how much pain you can take on the downside."

1
!HE WALJ.. srttar .:/ovRNA'- ~

J
.Jason Zweig's Rules for Investing
"Unfortunately, this, here, is still a mystery."
1. Take the Global View: Use a spreadsheet to track your total net worth- not day-to-day price fluctuations.

2. Hope for the best, but expect the worst: Brace for disaster via diversification and learning market history.
Expect good investments to do poorly from time to time. Don't allow temporary under-performance or disaster
to cause you to panic.

3. Investigate, then invest: Study companies' financial statement, mutual funds' prospectus, and advisors'
background. Do your homework!

4. Never say always: Never put more than 10% of your net worth into any one investment.

5. Know what you don't know: Don't believe you know everything. Look across different time periods; ask
what might make an investment go down.

6. The past is not prologue: Investors buy low sell high! They don't buy something merely because it is trending
higher.

7. Weigh what they say: Ask any forecaster for their complete track record of predictions. Before deploying a
strategy, gather objective evidence of its performance.

8./f it sounds too good to be true, it probably is: High Return + Low Risk + Short Time =8
9. Costs are killers: Trading costs can equal 1%; Mutual fund fees are another 1-2%; If middlemen take 3-5% of
your cash, its a huge drag on returns.

10. Eggs go splat: Never put all your eggs in one basket; diversify across U.S., Foreign stocks, bonds and cash.
Never fill your 401 (k) with employee company stock
ideas from The Most Important Thing by Howard Marks
by KenFaulkenberry I
To me, .!ik is the most interesting, challenging and essential aspect of investing.
First-level thinkers look for simple formulas and easy answers. Second-level thinkers know that
success in investing is the antithesis of simple.
G You can't do the same things others do and expect to outperform.
Most people are driven by greed, fear, envy, and other emotions that render objectivity
impossible and open the door for significant mistakes.
The choice isn't really between value and growth, but between value today and value
tomorrow. Growth investing represents a bet on company performance that may or
may not materialize in the future, while value investing is based primarily on
analysis of a company's current wealth.
Investors with no knowledge of (or concern for) profits, dividends, valuation, or the conduct of
business simply cannot possess the resolve needed to do the right thing at the right time.
Establishing a healthy relationship between fundamentals - value - and price is at the core of
successful investing.
G) Investing is a popularity contest, and the most dangerous thing is to buy something
at the peak of its popularity.
The safest and most potentially profitable thing is to buy something when no one likes it.
All bubbles start with some nugget of truth.
Risk means more things can happen than will happen.
The possibility of permanent loss is the risk I worry about.
Return alone-and especially return over short periods of time-says very little about the quality
of investment decisions.
Recognizing risk often starts with understanding when investors are paying it too little heed.
(!) The value investor thinks of high risk and low prospective returns as nothing but two sides of the
same coin, both stemming primarily from high prices.
The risk-is-gone myth is one of the most dangerous sources of risk, and a major contributor to
any bubble.
When worry is in short supply, risky borrowers and questionable schemes will have easy access to
capital, and the financial system will become precarious.
When everyone believes something is risky, their unwillingness to buy usually reduces the price to
the point where it's not risky.
(!) High quality assets can be risky, and low quality assets can be safe. It's just a matter
of the price paid for them.
Risk control is the best route to loss avoidance. Risk avoidance, on the other hand,
is likely to lead to return avoidance as well.
The road to long-term investment success runs through risk control more than through
aggressiveness.
You can't predict. You can Prepare.
(!) Investment success requires sticking with position made uncomfortable by their
variance with popular opinion.

TV &TOCK ANAL Y5 T ~ NO. I U5ED MY

~----------------~& NOW I'M
BLACK BER.R Y TO DUMP

I
DO YOU OWN STOCK M.'f' &HARES AS SOON USING THE
IN THE COMPANY AS THE'Y SPIKED FROM. PROFIT TO
YOU RECOMMENDED? M.Y RECOMMENDATION. BUY A HELI-
COPTER.
 The thing I find most interesting about investing is how paradoxical it is: how often the things
that seem most obvious-on which everyone agrees-turn out not to be true.
What's clear to the broad consensus of investors is almost always wrong.
The very coalescing of popular opinion behind an investment tends to eliminate its profit
potential.
G) Large amounts of money aren't made by buying what everybody likes. They're made
by buying what everybody underestimates.
In dealing with th e future, we must think about two things: (a) what might happen and (b) the
probability that it will happen.
The error is clear. The herd apf!lies optimism at the top and pessimism at the bottom.
One way to be selective is by making every effort to ascertain whether we're in a low return
environment or a high-return environment.
(!) Patient opportunism, buttressed by a contrarian attitude and strong balance sheet,
can yield amazing profits during meltdowns.
There are two kinds of people who lose money: those who know nothing and those
who know everything.
We may never know where we're going, but we'd better have a good idea where we are ..... and act
accordingly.
Several things go together for those who view the world as an uncertain place:
healthy respect for risk; awareness that we don't know what the future holds; an
understanding that the best we can do is view the future as a probability
distribution and invest accordingly; insistence on defensive investing; and
emphasis on avoiding pitfalls. To me that is what thoughtful investing is all about.
Low price is the ultimate source of margin for error.
A portfolio that contains too little risk can make you underperform in a bull market, but no one
ever went bust from that; there are far worse fates.
Bidding more for something is the same as saying you'll take less for your money.
The best defense against loss is thorough, insightful analysis and insistence on what Warren
Buffett calls "margin for error".
Leverage magnifies outcomes but doesn't add value.
Asymmetry - better performance on the upside than on the downside relative to what your style
alone would produce - should be every investor's goal.
The many hats of great investors
!' FIEI.J$ HI/6EJ. y fiEJ,.bFII~
Great investors are savvy generalists. I can think of five fields that
are hugely helpful to asset management. If you were to study
{01 A.J! ET /YIA#A6EMEI'II
these disciplines, your understanding of how markets work
would greatly improve.And you would be a better investor.
The five disciplines that can help:
Historian: Knowing what has happened in the past Mathematician/statistician: Don't worry if you
(and how often) is an enormous advantage when it suffer from math anxiety: If you can operate the
comes to investing. It informs you of the range of simplest calculator - even the free one that came
possibilities, allows you to conceptualize possible with your computer -you have the requisite math
outcomes to various scenarios and provides a skills needed. Investors can ignore mathematical
framework for thinking about market cycles. esoterics. But understanding basic math is key.
Psychiatrist: Fear and greed are the most enduring Accountant: An understanding of basic accounting
investor emotions. They lead to destructive is essential to grasping the fundamental health of a
behaviours. The crowd becomes an unthinking mob company or business model. It is how you
at tops and bottoms. Being able to read the determine whether an existing company is
emotional state of the market, as well as keeping profitable, or when a young firm might become
your own emotions in check, are hallmarks of great profitable .. when a formerly profitable company is
investors. heading down the wrong path.
Trial lawyer: When it comes to investing, everyone Learn market history, understand crowd psychology, how to
is trying to separate you from your money. Good think critically, be able to do simple math and understand basic
investing requires good judgment;You cannot blindly accounting. Do this, and you are on the path to becoming a much
accept everything you hear as truth, nor can you better investor.
reject everything. Being able to discern between
information that is valuable and that which is not, is ERithohz)
crucial.
Timeless Investing thoughts from Ben Graham's The Intelligent Investor:
1. To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside
information. What's needed is a sound intellectual framework for making decisions and the ability to keep
emotions from corroding that framework.
(b) The intelligent investor is a realist who sells to optimists and buys from pessimists.
3. No matter how careful you are, the one risk no investor can ever eliminate is the risk of being wrong. Only by
insisting on what Graham called the "margin of safety"- never overpaying, no matter how exciting an
investment seems to be -can you minimize your odds of error.
4. By developing your discipline and courage, you can refuse to let other people's mood swings govern your
financial destiny. In the end, how your investments behave is much less important than how you behave.
5. No statement is more true and better applicable to Wall Street than the famous warning of Santayana: "Those
who do not remember the past are condemned to repeat it".
6. We have not known a single person who has consistently or lastingly make money by thus "following the
market". We do not hesitate to declare this approach is as fallacious as it is popular.
7. The distinction between investment and speculation in common stocks has always been a useful one and its
disappearance is cause for concern.
8. To enjoy a reasonable chance for continued better than average results, the investor must follow policies
which are (1) inherently sound and promising, and (2) not popular on Wall Street.
9. An investor calculates what a stock is worth, based on the value of its businesses. A speculator gambles that a
stock will go up in price because somebody else will pay even more for it.
10. People who invest make money for themselves; people who speculate make money for their brokers. And that, in
turn, is why Wall Street perennially downplays the durable virtues of investing and hypes the gaudy appeal of
speculation.
11. There is no reason to feel any shame in hiring someone to pick stocks or mutual funds for you. But there's one
responsibility that you must never delegate. You, and no one but you, must investigate whether an adviser is
trustworthy and charges reasonable fees.
12. Thousands of people have tried, and the evidence is clear: The more you trade, the less you keep.
13. In an ideal world, the intelligent investor would hold stocks only when they are cheap and sell them when they
become overpriced, then duck into the bunker of bonds and cash until stocks again become cheap enough to buy
. (good luck with that these days)
@A great company is not a great investment if you pay too much for the stock.
15. The intelligent investor gets interested in big growth stocks not when they are at their most popular -..!!.!!!
when something goes wrong.
16. Mr. Market does not always price stocks the way an appraiser or a private buyer would value a business. Instead
when stocks are going up, he happily pays more than their objective value; and, when they are going down, he is
desperate to dump them for less than their true worth.
17. The intelligent investor shouldn't ignore Mr. Market entirely. Instead, you should do business with him- but only
to the extent that it serves your interests.
18. Mr. Market's job is to provide you with prices; your job is to decide whether it is to your advantage to act
on them. You no not have to trade with him just because he constantly begs you to.
19. Investing i n' t about beating others at their game. It' s about controlling yourself at your own game.
20. The only thing you should do with pro forma earnings is ignore them.
21. High valuations entail high risks.
22. A defensive investor can always prosper by looking patiently and calmly through the wreckage of a bear market.
23. Although there are good and bad companies, there is no such thing as a good stock; there are only good
stock prices, which come and go.
24. In tlie short run the market is a voting machine, but in the long run it is a weighing machine.
25. The margin of safety is always dependent on the price paid. It will be large at one price, small at some higher
price, nonexistent at some still higher price.
26. Investment is most intelligent when it is most businesslike.
27. At heart, "uncertainty" and "investing" are synonyms.
28. Without a saving faith in the future, no one would ever invest at all. To be an investor, you must be a believer in
a better tomorrow.
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69 Famous Quotes by Warren Buffett on Investing

1. "Never invest in a business you cannot understand."
2. "Always invest for the long term."
3. "No matter how great the talent or efforts, some things just take time. You can't produce a baby in one month
by getting nine women pregnant."
4. "Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down."
5. "What we learn from history is that people don't learn from history."
6. "Buy a business, don't rent stocks."
7. "You don't need to be a rocket scientfst. Investing is not a game where the guy with the 160 IQ beats the guy
with 130IQ."
8. "We have long felt that the only value of stock forecasters is to make fortune-tellers look good." .
9. "A prediction about the direction of the stock market tells you nothing about where stocks are headed, but a
whole lot about the person doing the predicting."
10. "Someone's sitting in the shade today because someone planted a tree a long time ago.".
11. "I really like my life. I've arranged my life so that I can do what I want:"
12. "We will only do with your money what we would do with our own."
13. "If you don't feel comfortable owning something for 10 years, then don't own it for 10 minutes."
14. "Price is what you pay. Value is what you get."
15. "The Stock Market is designed to transfer money from the Active to the Patient."
16. "I never attempt to make money on the stock market. I buy on the assumption that they could close
the market the next day and not reopen it for ten years."
17. "By periodically investing in an index fund, the know-nothing investors can actually outperform most
investment professionals."
18. "I have pledged ... to always run Berkshire with more than ample cash ... I will not trade even a night's sleep
for the chance of extra profits."
19. "The best business returns are usually achieved by companies that are doing something quite similar
today to what they were doing five or ten years ago."
20. "The stock market is a no-called-strike game. You don't have to swing at everything- you can wait for your
pitch."
21. "Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives
good results."
22. "I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over."
23. "For some reason, people take their cues from price action rather than from values. What doesn't work is
when you start doing things that you don't understand or because they worked last week for somebody else.
The dumbest reason in the world to buy a stock is because it's going up."
24. "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."
25. "We don't get paid for activity, just for being right. As to how long we will wait, we'll wait indefinitely."
26. As Buffett said in the speech, "He's not looking at quarterly earnings projections, he's not looking at next
year's earnings, he's not thinking about what day of the week it is, he doesn't care what investment research
from any place says, he's not interested in price momentum, volume or anything. He's simply asking: What
is the business worth?"
27. "Buy companies with strong histories of profitability and with a dominant business franchise."
28. "Most people get interested in stocks when everyone else is. The time to get interested is when no one else is.
You can't buy what is popular and do well."
29. "Our approach is very much profiting from lack of change rather than from change. With Wrigley
chewing gum, it's the lack of change that appeals to me. I don't think it is going to be hurt by the
Internet. That's the kind of business I like."
30. "When asked how he became so successful in investing, Buffett answered: 'we read hundreds and hundreds
of annual reports every year."
31. "I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later,
one will." . 71
CoN.,-1./j V .
32. "Only those who will be sellers of equities in the near future should be happy at seeing stocks
rise. Prospective purchasers should much prefer sinking prices."
33. "Diversification is a protection against ignorance. It makes very little sense for those who know what they're
doing."
34. "It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things
differently."
35. "I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when
others are fearful."
36. "Why not invest your assets in the companies you really like? As Mae West said, 'Too much of a good
thing can be wonderful."
37. "Our favorite holding period is forever."
38. "The most important thing to do if you find yourself in a hole is to stop digging."
39. "Money is not everything. Make sure you earn a lot before speaking such nonsense."
40. "Risk comes from not knowing what you're doing."
41. "The critical investment factor is determining the intrinsic value of a business and paying a fair or bargain
price." .
42. "An investor should ordinarily hold a small piece of an outstanding business with the same tenacity that an
owner would exhibit if he owned all of that business." .
43. "Diversification may preserve wealth, but concentration builds wealth."
44. "You won't keep control of your time, unless you can say 'no.' You can't let other people set your agenda in
life."
45. "In the business world, the rearview mirror is always clearer than the windshield."
46. "If a business does well, the stock eventually follows."
47. "Cash never makes us happy, but it's better to have the money burning a hole in Berkshire's pocket than
resting comfortably in someone else's."
48. "Wall Street is the only place that people ride to in a Rolls-Royce to get advice from those who take the
subway."
49. "A public-opinion poll is no substitute for thought."
50. "I never buy anything unless I can fill out on a piece of paper my reasons. I may be wrong, but I would
know the answer to that ... I'm paying $32 billion today for the Coca Cola Company because ... If you
can't answer that question, you shouldn't buy it. If you can answer that question, and you do it a few
times, you'll make a lot of money."
51. "The investor of today does not profit from yesterday's growth."
52. "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."
53. "Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate
in it."
54. "Only when the tide goes out do you discover who's been swimming naked."
55. "The fact that people will be full of greed, fear, or folly is predictable. The sequence is not predictable."
56. "Time is the friend of the wonderful company, the enemy of the mediocre."
57. "I do not like debt and do not like to invest in companies that have too much debt, particularly long-term
debt. With long-term debt, increases in interest rates can drastically affect company profits and make future
cash flows Jess predictable."
58. "Turnarounds seldom turn."
59. "If at first you do succeed, quit trying on investing."
60. "I don't measure my life by the money I've made. Other people might, but certainly don't."
61. "The business schools reward complex behavior more than simple behavior, but simple behavior is more
effective."
62. "It's not debt per say that overwhelms an individual corporation or country. Rather it is a continuous increase
in debt in relation to income that causes trouble."
63. "A great investment opportunity occurs when a marvelous business encounters a one-time huge, but
solvable problem."
64. "We like to buy businesses, but we don't like to sell them."
65. "Money to some extent sometimes let you be in more interesting environments. But it can't change how
many people love you or how healthy you are."
66. "Read Ben Graham and Phil Fisher read annual reports, but don't do equations with Greek letters in them."
67. "In a commodity business, it's very hard to be smarter than your dumbest competitor."
68. "A hyperactive stock market is the pickpocket of enterprise."
69. "Valuing a business is part art and part science."
 12 Market Wisdoms From Gerald Loeb

1. The most important single factor in shaping security markets is public psychology.

2. To make money in the stock market you either have to be ahead of the crowd or very sure they are
going in the same direction for some time to come.

3. Accepting losses is the most important single investment device to insure safety of capital.

4. The difference between the investor who year in and year out procures for himself a final net profit, and
the one who is usually in the red, is not entirely a question of superior selection of stocks or superior
timing. Rather, it is also a case of knowing how to capitalize successes and curtail failures.

5. One useful fact to remember is that the most important indications are made in the early stages of a
broad market move. Nine times out of ten the leaders of an advance are the stocks that make new highs
ahead of the averages.

6. There is a saying, "A picture is worth a thousand words." One might paraphrase this by saying a profit
is worth more than endless alibis or explanations... prices and trends are really the best and
simplest "indicators" you can find.

7. Profits can be made safely only when the opportunity is available and not just because they
happen to be desired or needed.

8. Willingness and ability to hold funds uninvested while awaiting real opportunities is a key to
success in the battle for investment survival.-

9. In addition to many other contributing factors of inflation or deflation, a very great factor is the
psychological. The fact that people think prices are going to advance or decline very much contributes to
their movement, and the very momentum of the trend itself tends to perpetuate itself.

10. Most people, especially investors, try to get a certain percentage return, and actually secure a
minus yield when properly calculated over the years. Speculators risk less and have a better chance
of getting something, in my opinion.

11. I feel all relevant factors, important and otherwise, are registered in the market's behavior,
and, in addition, the action of the market itself can be expected under most circumstances to stimulate
buying or selling in a manner consistent enough to allow reasonably accurate forecasting of news in
advance of its actual occurrence.

@ vou don't need analysts in a bull market, and you don't want them in a bear market

AWO 1-le~~ 1ED WffH HIS,

ALWAY~ ACCORAfE,
POSIMARKET PREDICTIONS.

1) "That's overbought" (I'm not long and think buyers are stupid)
2) "That's oversold" (I'm long and think sellers are stupid)
3) "It's a stock picker's market" (I get paid to pick stocks)
4) "Stay diversified" (I wish I could get paid to pick stocks)
5) "That's priced in" (I missed the move)
6) "I'm cautiously optimistic" (Things usually work out. But sometimes they don't)
7) "There's still a lot of uncertainty" (I'm underperforming)
8) "I'm waiting for clarity" (I'm underinvested and desperately need a pullback)
9) "Stocks are fairly valued" (No idea)
10) "Returns will be lower going forward" (My investors should expect lower returns going forward)
I'm always on the lookout for new ways to understand highly effective performance, and in my latest
book, How to Think Like Sir Alex Ferguson, I share an example of how the great Manchester United
coach encouraged his players to do the same.

Ferguson would tell his players a story of three men who were laying bricks. Each was asked what he
was doing. "Laying bricks," answered the first. "Earning 10 per hour," replied the second. The third
was driven by a bigger vision and said: "I'm building a cathedral and, one day, I'll bring my kids back
here and tell them that their dad contributed to this magnificent building."

Ferguson suggested to his players that they could apply these three approaches to the training
session they were about to embark on. 'I'm just practising," would be the answer from the first player
training. 'I'm earning 1,000 per hour," would be the second. The third response would be: 'I'm
helping to build the best Manchester United team ever and I'll be proud to tell my grandchildren I was
part of it.'

Still pondering these words as they commenced training, David Beckham promptly scored a gem
from 30 yards and ran off in celebration, shouting, 'Cathedral1, Bricklayers 0."
At its core is the idea that there are three essential ways of approaching a practice session.

~
You show up. You do the job exactly as you're told to do it; nothing more, nothing less. You improve a
bit.

~
You show up. You do the job, and you target certain tasks that'll help you toward your goal. You push
yourself and you get a lot better.

~
You show up, having thought about how today's fits into the larger goal. You work very hard,
repeatedly pushing yourself into the discomfort zone, with full commitment. Later, you
reflect/analyze/critique your performance with a cool, objective eye.

Traditionally, when we talk about effective performance, we use the idea of focus- the amount of
attention a person puts into their actions.

One reason I like Ferguson's concept is that it takes us beyond the basic idea of focus and into the
more targeted idea of investment - sensing and measuring the total amount of time and energy put
into the process of getting better.

I also like it because it embraces the idea that some of the most vital work happens away from the
workplace, in the time we use to reflect, strategize, plan, and figure out honest answers to those two
simple but immensely difficult questions we face every day: where are we right now, really? Are we
where we want to be tomorrow?

Jenny Craig on commitment

"My husband always tells me that I'm the most unrelenting person he's ever met, and it's true. If I make a
commitment to something, I will stick to it no matter what." This is sage advice for both weight
management and entrepreneurial or business success. Nothing is more important than dedication.
 WHIC.H TRAITS. oF THE Wol!~h 1$.
t..EAbl/116 !NV~/OR 7D Can?P!~E
Building The Perfect Investor
Charles Murray wrote a thought provoking book about the problems with our education system in which he outlines
Howard Gardner's seven different kinds of intelligence. Here are the different kinds of intelligence along with a
brief description by Murray from his book Real Education: Four Simple Truths for Bringing America's Schools
Back to Reality:

I. Bodily-kinesthetic intelligence encompasses physical skills-gross motor skills, fine motor skills, and more generally, the
ability to exert subtle and precise physical control over one's movements.
2. Musical intelligence is what it sounds like, encompassing highly developed senses of pitch, rhythm, tones, and the ways in
which they combine.
3. Interpersonal intelligence involves interactions with others. People with high interpersonal intelligence are good at sensing
others' emotions and motivations. They are empathetic, able to work effectively as part of a group, good at communicating
with others, and effective at manipulating the responses of others.
4. Intrapersonal intelligence involves knowing oneself and being able to use that knowledge effectively. People with high
intrapersonal intelligence have a realistic grasp of their own emotions, motivations, strengths, and limits. They are able to
exert self-discipline and defer gratification. They can remain analytical in times of stress. Courage and prudence are parts of
intrapersonal intelligence. In excess, some of the qualities that go into intrapersonal intelligence can express themselves as
neuroticism or extreme introversion, and can paralyze action through over-analysis.
5. Spatial intelligence refers in part to the ability to visualize and mentally manipulate objects, as when an engineer holistically
grasps how the parts of a mechanism interact or a chess master plays a game without looking at the board.
6. Logical-mathematical intelligence involves numbers, logic, and abstractions. By definition, high logical-mathematical
intelligence means the capacity for advanced mathematics, but it also expresses itself in the ability to mount and understand
complex arguments and chains of reasoning, and the ability to make subtle distinctions. Logical-mathematical intelligence is
especially important in the sciences and the law, but is useful for every occupation.
7. Linguistic intelligence embraces everything having to do with language and the information language conveys. High
linguistic intelligence includes the abilities to absorb complex written text and to express oneself precisely, eloquently, or
persuasively as the situation may require. The ability to learn foreign languages easily is associated with high linguistic
intelligence. Memory-the ability to store and retrieve large amounts of information at will-is part of linguistic intelligence.

So first, let's rank these intelligences in order of importance for investors. Mosr /MPofirNJT
FoA. IN VJ{I#tr
I. Intrapersonal intelligence- Temperament-specifically the ability to stick to strategy when times get tough- is the defining
characteristic of every great investor I've ever studied. The ability to control (or ignore) one's emotions is key in markets. As
Confucius apocryphally said, "he who masters himself is the mightiest warrior."
2. Logical-mathematical intelligence- Building complex chains of reasoning is essential for successful investing. The ability
to think on the 2nd and 3rd level is a huge edge.
3. Linguistic intelligence- Many great investors (especially activists) have a way of articulating their argument in a convincing
and compelling way. Building and communicating an investment thesis is a key advantage.
4. Interpersonal intelligence - Some might place this lower, as it is more relevant for sales roles than for investing. But along
with linguistic ability, the ability to work well with people and be there for them when times are tough is a useful skill for
investors, if only to keep people from redeeming at the wrong time.
5. Spatial intelligence- There is probably something helpful about having spatial intelligence for investing, perhaps being able
to visualize the big picture.
6. Bodily-kinesthetic intelligence- I think general health is an advantage, but health is differe.11t from bodily-kinesthetic :/1
intelligence. Don't see how this would be relevant for any investor. V
7. , Musical intelligence- would love to hear an argument for this mattering, I can't think of an thin
 ''AN IIN!TOPPA8J.E FORCE n

I think the best qualified person to build the perfect investor would be Tren Griffin or Jack Schwager, but here is my attempt.

Buffett's intrapersonal intelligence. He is the master of the discipline and self-control that are the keystones of a great
investment process. (Hon. mention: Seth Klarman)
Jim Simons's logical-mathematical intelligence. Renaissance Technology's track record is outrageous, built on the back of
an obviously effective quantitative investment process engineered by Simons and his team. He was a code breaker and expert
in pattern recognition.
Howard Marks' linguistic intelligence. I toyed with putting Buffett here again, but I've always loved Mark's ability to write
and communicate his investment philosophy and individual investment ideas.
Jack Bogle's interpersonal intelligence. I've watched a lot of Bogle interviews and am constantly amazed at how likeable
and clear he is. My guess is he could sell underwear to a nudist.
Peter Thiel's spatial intelligence. This is a bit of a stretch, but I know he is very good at chess. (Hon. mention: Ray Dalia)
Magic Johnson's bodily-kinesthetic intelligence. Great investor, legendary athlete.
???'s musical intelligence. Who knows?
~o-rM~e
This investing Frankenstein would be an unstoppable force. / l(f -rHo( rHfourvt
V/ ~ ~p~c.:rr-

An Investing Frankenstein
by Joshua M Brown
Patrick O'Shaughnessy attempts to combine all the key attributes in order to create a "Perfect Investor" in a new
post at his site, Millennia] Invest.

I'll go the other way around and build the absolute worst inyestor, taking the worst qualities that we can possess
to create an absolute Frankenstein monster ...

1. Obsesses over each day's activity

2. Relentlessly judges self against benchmarks, picking and choosing which one "matters" on any given day
3. Is preoccupied with other people's trades and quick to hurl insults at people who get things wrong
4. Cannot tolerate the disagreement of other investors, takes personal offense and lashes out in the presence of
dissent over an investment idea
5. Attempts to assign meaning to every random fluctuation in the markets
6. Constantly incorporating new data into a "master" thesis or theme, rejecting whatever doesn't fit
7. Keeps a running score over who else was wrong or right over years and years
8. Emphasizes winning trades in conversation as though they exist in isolation
9. Plays for batting average (W's and L's) as opposed to the overall result, ignores trading costs, taxes and
other tangible portfolio friction
10. Frequently abandons an underperforming strategy when something else appears to be working better
11. Blames larger forces for unsatisfactory results, ie: The Fed, Central Banking, Politicians, etc
12. Adopts really strong opinions and defends them to the death
13. Allows religious, political or social views to color (dominate?) their investment portfolio I strategy
14. Uses tips from experts in lieu of research, misunderstands the difference between TV and real life
15. Forgets that a stock or a fund doesn't know or care who its owners are, or what price they acquired it at;
trades for revenge
We've all exhibited a few of these traits. If you come into contact with someone who exhibits many or most of
them, know that you're dealing with a schmuck and run the other wa
 Jim Rogers on the world of investing
Acknowledge the complexity of the world and resist the impression that you easily understand it. People are too
quick to accept conventional wisdom, because it sounds basically true and it tends to be reinforced by both their
peers and opinion leaders, many of whom have never looked at whether the facts support the received wisdom.
It's a basic fact of life that many things "everybody knows" turn out to be wrong.

Bottoms in the investment world don't end with four-year lows; they end with 10- or 15-year lows.

If everyone thinks one way, it is likely to be wrong. If you can figure out that it is wrong, you are likely to make a
lot of money.

The price of a commodity will never go to zero. When you invest in commodities futures, you're not buying a
piece of paper that says you own an intangible piece of company that can go bankrupt.

@> Most successful investors, in fact, do nothing most of the time.

Buy low and sell high. It's pretty simple. The problem is knowing what's low and what's high.

If you were smart in 1807 you moved to London, if you were smart in 1907 you moved to New York City, and if
you are smart in 2007 you move to Asia.

History shows that people who save and invest grow and prosper, and the others deteriorate and
collapse.

One ofthe best rules anybody can learn about investing is to do nothing, absolutely nothing, unless there
is something to do. I just wait until there is money lying in the corner, and alii have to do is go over there
and pick it up. I wait for a situation that is like the proverbial shooting fish in a barrel.

The biggest public fallacy is that the market is always right. The market is nearly always wrong. I can assure you
of that.

If you want to make a lot of money, resist diversification.

Diversification is something that stock brokers came up with to protect themselves, so they wouldn't get sued
for making bad investment choices for clients. Henry Ford never diversified, Bill Gates didn't diversify. The way
to get rich is to put your eggs in one basket, but watch that basket very carefully. And make sure you
have the right basket.

Following what everyone else is doing is rarely a way to get rich.

Historically, there has been a bull market in commodities every 20 or 30 years.

The most sensible skill that I can give to somebody born in 2003 is a perfect command of Mandarin.

You will never get anywhere if you do not do your homework.

I've got one shot going through this life. I want to make sure I do as much as I can.

5TUDIE5 HA.VE. SHOWN "

E
"THAT'S WHY THE s 'I'E~. OUR FtES 1\RE
THI\T MONKEYS CAN PICK DOG&R.T MUTUM. FUND ~ J.iiGH1 euT t DON'T
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Peter Lynch on investing t~,.,E~ li1A{;.EJ.J.IW FUN/) mANA~Ar rl~i.ff'l)
Everyone has the brainpower to follow the stock market. If you made it through fifth-
grade math, you can do it.
0 The Rule of 72 is useful in determining how fast money will grow. Take the annual
return from any investment, expressed as a percentage, and divide it into 72. The result
is the number of years it will take to double your money.
If you're prepared to invest in a company, then you ought to be able to explain why in
simple language that a fifth grader could understand, and quickly enough so the fifth
grader won't get bored.
You get recessions, you have stock market declines. If you don't understand that's going
to happen, then you're not ready, you won't do well in the markets.
The real key to making money in stocks is not to get scared out of them.
There are substantial rewards for_adopting a regular routine of investing and following it
no matter what, and additional rewards for buying more shares when most investors are
scared into selling.
0 The list of qualities (an investor should have) include patience, self-reliance, common
sense, a tolerance for pain, open-mindedness, detachment, persistence, humility,
flexibility, a willingness to do independent research, an equal willingness to admit
mistakes, and the ability to ignore general panic.
If you go to Minnesota in January, you should know that it's gonna be cold. You don't
panic when the thermometer falls below zero.
The natural-born investor is a myth.
I don't know anyone who said on their deathbed: 'Gee, I wish I'd spent more time at the
office.'
A price drop in a good stock is only a tragedy if you sell at that price and never lmy
~ To me, a price drop is an opportunity to load up on bargains from among your
worst performers and your laggards that show promise. If you can't convince yourself
'When I'm down 25 percent, I'm a buyer' and banish forever the fatal thought 'When
[ I'm down 25 percent, I'm a seller,' then you'll never make a decent profit in stocks.
G Stocks are a safe bet, but only if you stay invested long enough to ride out the corrections.
Long shots almost always miss the mark.
You just don't know when you can find the bottom.
he person that huns over the most rocks wins the game. And that's always been my
philosophy.
There seems to be an unwritten rule on Wall Street: If you don't understand it, then put
your life savings into it. Shun the enterprise around the corner, which can at least be
observed, and seek out the one that manufactures an incomprehensible product. Nil
The extravagance of any corporate office is directly proportional to management's
reluctance to reward the shareholders.
You shouldn't just pick a stock - you should do your homework.
You should not buy astock because it's cheap but because you know a lot about it.
The worst thing you can do is invest in companies you know nothing about.
Unfortunately, buying stocks on ignorance is still a popular American pastime.
Never buy anything that you can't illustrate on the back of a napkin.
0 You only need a few good stocks in your lifetime. I mean how many times do you need
a stock to go up ten-fold to make a lot of money? Not a lot.
~--------~--------~sr-------------------~
I BOUGHT MY FIRST f! THAT MEANS I'M A THE THAT'S
STOCK AND IT WENT
UP FIVE PERCENT IN ~
1
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GENIUS. I PLAN TO
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ONE WEEK!
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How to Be Like Mike: Life Lessons from Michael Jordan

"If you do the work, you get rewarded. There are no shortcuts in life."

"You can practice shooting eight hours a day, but if your technique is wrong, then all you become is very good at shooting the
wrong way. Get the fundamentals down and the level of everything you do will rise."

When Jordan first tried out for his high school basketball team, he didn't make varsity. In an interview with ESPN, Jordan
described how he felt: "It was embarrassing not making that team. They posted the roster and it was there for a long, long time
without my name on it. I remember being really-mad too, because there was a guy that made it that really wasn't as good as
me." "Whenever I was working out and got tired and figured I ought to stop, I'd close my eyes and see that list in the locker
room without my name on it. .. that usually got me going again."

"I know fear is an obstacle for some people, but it's an illusion to me."

"Failure makes me work even harder."

"You have to expect things of yourself before you can do them."

"Heart is what separates the good from the great."

"Just play. Have fun. Enjoy the game."

"I have missed more than 9,000 shots in my career. I have lost almost 300 games. On 26 occasions I have been entrusted to
take the game winning shot ... and missed. And I have failed over and over and over again in my life. And that is why I
succeed."

"Some people want it to happen, some wish it would happen, others make it happen."

"If you think and achieve as a team, the individual accolades will take care of themselves. Talent wins games, but teamwork
and intelligence win championships."

"I never looked at the consequences of missing a big shot. .. when you think about the consequences you always think of a
negative result."

Jordan made one of the most shocking decisions in sports history when he retired from professional basketball on October 6,
1993. It's hard to fathom quitting after winning three championships in a row, but Michael's reasons were actually very simple:
"I just needed to change. I was getting tired of the same old activity and routine and I didn't feel all the same appreciation that I
had felt before and it was tiresome. "A lot of things correlated with that- my father dying, the opportunity to play baseball,
my desire to make a change. I look back on it and it was perfect timing to break away from it and see what I was missing, to
see what it meant to me, to see the enjoyment that I got from the game."

Even though Jordan didn't make it into the major leagues as a baseball player, it was important that he listened to the voice in
his head that was telling him to make a change. He returned to the NBA refreshed in 1995 and promptly won three more
championships. If you think that business is boring, then you're doing it wrong. The more fun you make your work, the more
energy and enthusiasm you'll bring to it- and the more success you'll find.

"Once I made a decision, I never thought about it again." Jordan's made some tough decisions, but he doesn't dwell on them.
There's no reason to worry about the past because it's not coming back.

"Never think about what's at stake .. . If you start to think about who is going to win the championship, you've lost your
focus."
Things Everyone Should Know About Investing and
the Economy
By Morgan Housel I ( rNE MtJfi.EY {QO/...; FORmE~ W!:T WRii8)

1. Saying "I'll be greedy when others are fearful" is easier than actually doing it.
2. When most people say they want to be a millionaire, what they really mean is "I want to spend $1 million," which is
literally the opposite of being a millionaire.
3. Daniel Kahneman's book Thinking Fast and Slow begins, "The premise of this book is that it is easier to recognize other
people's mistakes than your own." This should be every market commentator's motto.
4. Blogger Jesse Livermore writes, "My main life lesson from investing: self-interest is the most powerful force on earth,
and can get people to embrace and defend almost anything."
5. As Erik Falkenstein says: "In expert tennis, 80% of the points are won, while in amateur tennis, 80% are lost. The same
is true for wrestling, chess, and investing: Beginners should focus on avoiding mistakes, experts on making great
moves."
6. Investor Dean Williams once wrote, "Confidence in a forecast rises with the amount of information that goes into it. But
the accuracy of the forecast stays the same."
7. Only 7% of Americans know stocks rose 32% last year, according to Gallup. One-third believe the market either fell or
stayed the same. Everyone is aware when markets fall; bull markets can go unnoticed.
8. Dean Williams once noted that "Expertise is great, but it has a bad side effect: It tends to create the inability to accept
new ideas." Some ofthe world's best investors have no formal backgrounds in finance-- which helps them
tremendously.
9. The Financial Times wrote, "In 2008 the three most admired personalities in spm1 were probably Tiger Woods, Lance
Armstrong and Oscar Pistorius." The same falls from grace happen in investing. Chose your role models carefully.
10. Investor Nick Murray once said, "Timing the market is a fool's game, whereas time in the market is your greatest natural
advantage." Remember this the next time you're compelled to cash out.
11. Bill Seidman once said, "You never know what the American public is going to do, ~ut you know that they will do
it all at once." Change is as rapid as it is unpredictable.
12. Napoleon's definition of a military genius was, "the man who can do the average thing when all those around him are
going crazy." Same goes in investing.
13. Blogger Jesse Livermore writes, "Most people, whether bull or bear, when they are right, are right for the wrong reason,
in my opinion."
14. Investors anchor to the idea that a fair price for a stock must be more than they paid for it. It's one of the most common,
and dangerous, biases that exists. "People do not get what they want or what they expect from the markets; they get
what they deserve," writes .Bill Bonner.
15. Jason Zweig writes, "The advice that sounds the best in the short run is always the most dangerous in the long run."
16. Billionaire investor Ray Dalia once said, "The more you think you know, the more closed-minded you'll be."
Repeat this line to yourself the next time you're certain of something.
17. "Buy and hold only works if you do both when markets crash. It's much easier to both buy and hold when markets are
rising," says Ben Carlson.
18. John Reed once wrote, "When you first start to study a field, it seems like you have to memorize a zillion things. You
don't. What you need is to identify the core principles-- generally three to twelve of them-- that govern the field.
The million things you thought you had to memorize are simply various combinations ofthe core principles." Keep that
in mind when getting frustrated over complicated financial formulas.
19. James Grant says, "Successful investing is about having people agree with you ... later."
20. Scott Adams writes, "A person with a flexible schedule and average resources will be happier than a rich person who
has everything except a flexible schedule. Step one in your search for happiness is to continually work toward having
control of your schedule." "/'/
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 21 . "If your investment horizon is long enough and your position sizing is appropriate, you simply don't argue with
idiocy, you bet against it," writes Bruce Chadwick.
22. The phrase "double-dip recession" was mentioned 10.8 million times in 2010 and 201 I, according to Google. It never
came. There were virtually no mentions of "financial collapse" in 2006 and 2007. It did come. A similar story can be
told virtually every year.
23 . "The big money is not in the buying or the selling, but in the sitting," said Jesse Livermore.
24. Investors want to believe in someone. Forecasters want to earn a living. One of those groups is going to be disappointed.
I think you know which.
25. In a poll of 1,000 American adults, asked, "How many millions are in a trillion?" 79% gave an incorrect answer or
didn't know. Keep this in mind when debating large financial problems.

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26. As last year's Berkshire Hathaway shareholder meeting, Warren Buffett said he has owned 400 to 500 stocks during his
career, and made most of his money on 10 of them. This is common: a large portion of investing success often comes
from a tiny proportion of investments.
27. The S&P 500 gained 27% in 2009-- a phenomenal year. Yet 66% of investors thought it fell that year, according to a
survey by Franklin Templeton. Perception and reality can be miles apart.
28. As Nate Silver writes, "When a possibility is unfamiliar to us, we do not even think about it." The biggest risk is always
something that no one is talking about, thinking about, or preparing for. That's what makes it risky.
29. The next recession is never like the last one.
30. Since 1871, the market has spent 40% of all years either rising or falling more than 20%. Roaring booms and crushing
busts are perfectly normal.
31 . As the saying goes, "Save a little bit of money each month, and at the end of the year you'll be surprised at how little
you still have."
32. John Maynard Keynes once wrote, "It is safer to be a speculator than an investor in the sense that a speculator is one
who runs risks of which he is aware and an investor is one who runs risks of which he is unaware."
@"History doesn't crawl; it leaps," writes Nassim Taleb. Events that change the world-- presidential assassinations,
terrorist attacks, medical breakthroughs, bankruptcies -- can happen overnight.
34. Our memories of financial history seem to extend about a decade back. "Time heals all wounds," the saying goes. It also
erases many important lessons.
35. You are under no obligation to read or watch financial news. If you do, you are under no obligation to take any of it
seriously.
36. The most boring companies -- toothpaste, food, bolts -- can make some of the best long-term investments. The most
innovative, some of the worst.
37. Most economic news that we think is important doesn't matter in the long run. Derek Thompson of The Atlantic once
wrote, "I've written hundreds of articles about the economy in the last two years. But I think I can reduce those
thousands of words to one sentence. Things got better, slowly."
38. A broad index of U.S. stocks increased 2,000-fold between 1928 and 2013, but lost at least 20% of its value 20 times
during that period. People would be less scared of volatility if they knew how common it was.
39. There is a strong correlation between knowledge and humility. The best investors re~;~lize how little they know.
40. Most people would be better off if they stopped obsessing about Congress, the Federal Reserve, and the president, and
focused on their own financial mismanagement. ,/'
 41. There were 272 automobile companies in 1909. Through consolidation and failure, three emerged on top, two of which
went bankrupt. Spotting a promising trend and a winning investment are two different things.
42. The more someone is on TV, the less likely his or her predictions are to come true. (University of California, Berkeley
psychologist Phil Tetlock has data on this).
43. Maggie Mahar once wrote that "men resist randomness, markets resist prophecy." Those six words explain most
people's bad experiences in the stock market.
44. "We're all just guessing, but some of us have fancier math," writes Josh Brown.
45. When you think you have a great idea, go out of your way to talk with someone who disagrees with it. At worst,
you continue to disagree with them. More often, you'll gain valuable perspective. Fight confirmation bias like the
plague.
46. Try to learn as many investing mistakes ~s possible vicariously through others. Other people have made every mistake
in the book. You can learn more from studying the investing failures than t~e investing greats.
47. Bill Bonner says there are two ways to think about what money buys. There's the standard of living, which can be
measured in dollars, and there's the quality of your life, which can't be measured at all.
48. If you're going to try to predict the future-- whether it's where the market is heading, or what the economy is going to
do, or whether you'll be promoted-- think in terms of probabilities, not certainties. Death and taxes, as they say, are the
only exceptions to this rule.
49. Focus on not getting beat by the market before you think about trying to beat it.
50. Finance would be better if it was taught by the psychology and history departments at universities.
51. According to economist Tim Duy, "As long as people have babies, capital depreciates, technology evolves, and tastes
and preferences change, there is a powerful underlying impetus for growth that is almost certain to reveal itself in any
reasonably well-managed economy."
@study successful investors, and you'll notice a common denominator: they are masters of psychology. They can't
control the market, but they have complete control over the gray matter between their ears.
53. The odds that at least one well-known company is insolvent and hiding behind fraudulent accounting are pretty high.
54. The book Where Are the Customers' Yachts? was written in 1940, and most people still haven't figured out that brokers
don't have their best interest at heart.
55. Cognitive psychologists have a theory called "backfiring." When presented with information that goes against your
viewpoints, you not only reject challengers, but double down on your view. Voters often view the candidate they
support more favorably after the candidate is attacked by the other party. In investing, shareholders of companies facing
heavy criticism often become die-hard supporters for reasons totally unrelated to the company's performance.
56. "In the financial world, good ideas become bad ideas through a competitive process of 'can you top this?"' Jim Grant
once said. A smart investment leveraged up with debt becomes a bad investment very quickly.
57. Most investors have no idea how they actually perform. Markus Glaser and Martin Weber of the University of
Mannheim asked investors how they thought they did in the market, and then looked at their brokerage statements. "The
correlation between self ratings and actual performance is not distinguishable from zero," they concluded.
58. Harvard professor and former Treasury Secretary Larry Summers says that "virtually everything I taught" in economics
was called into question by the financial crisis.
59. Asked about the economy's performance after the financial crisis, Charlie Munger said, "If you're not confused, I don't
think you understand."
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@There is virtually no correlation between what the economy is doing and stock market returns. According to
Vanguard, rainfall is actually a better predictor of future stock returns than GDP growth. (Both explain slightly more
than nothing.)
61. You can control your portfolio allocation, your own education, who you listen to, what you read, what evidence you pay
attention to, and how you respond to certain events. You cannot control what the Fed does, laws Congress sets, the next
jobs report, or whether a company will beat earnings estimates. Focus on the former; try to ignore the latter.
62. Companies that focus on their stock price will eventually lose their customers. Companies that focus on their customers
will eventually boost their stock price. This is simple, but forgotten by countless managers.
63. Investor Seth Klarman says, "Macro worries are like sports talk radio. Everyone has a good opinion which probably
means that none of them are good."
64. Several academic studies have shown that those who trade the most earn the lowest returns. Remember Pascal's
wisdom: "All man's miseries derive from not being able to sit in a quiet room alone."
65. The best company in the world run by the smartest management can be a terrible investment if purchased at the
wrong price.
66. There will be seven to 10 recessions over the next 50 years. Don't act surprised when they come:
67. No investment points are awarded for difficulty or complexity. Simple strategies can lead to outstanding returns.
68. For many, a house is a large liability masquerading as a safe asset.
69. The single best three-year period to own stocks was during the Great Depression. Not far behind was the three-year
period starting in 2009, when the economy struggled in utter ruin. The biggest returns begin when most people think the
biggest losses are inevitable.
70. Remember what Buffett says about progress: "First come the innovators, then come the imitators, then come the idiots."
71. And what Mark Twain says about truth: "A lie can travel halfway around the world while truth is putting on its shoes."
72. And what Marty Whitman says about information: "Rarely do more than three or four variables really count. Everything
else is noise."
73. Someone once asked Warren Buffett how to become a better investor. He pointed to a stack of annual reports. "Read
500 pages like this every day," he said. "That's how knowledge works. It builds up, like compound interest. All of you
can do it, but I guarantee not many of you will do it."
74. The Congressional Budget Office's 2003 prediction of federal debt in the year 2013 was off by $10 trillion. Forecasting
is hard. But we still line up for it.
75. Two things make an economy grow: population growth and productivity growth. Everything else is a function of one of
those two drivers.
76. The single most important investment question you need to ask yourself is, "How long am I investing for?" How you
answer it can change your perspective on everything.
77. "Do nothing" are the two most powerful-- and underused --words in investing. The urge to act has transferred an
inconceivable amount of wealth from investors to brokers.
78. It's easy to mistake luck for success. J. Paul Getty said, the key to success is: 1) rise early, 2) work hard, 3) strike oil.
79. I once asked Daniel Kahneman about a key to making better decisions. "You should talk to people who disagree with
~and you should talk to people who are not in the same emotional situation you are," he said. Try this before making
your next investment decision.
80. No one on the Forbes 400 list of richest Americans can be described as a "perma-bear." A natural sense of
optimism not only healthy, but vital.
81. A hedge fund once described its edge by stating, "We don't own one Apple share. Every hedge fund owns Apple." This
type of simple, contrarian thinking is worth its weight in gold in investing.
 11
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10 George Soros on Investing

"If investing is entertaining, if you're having fun, you're probably not making any money. Good
investing is boring." -

"I'm only rich because I know when I'm wrong ... I basically have survived by recognizing my mistakes."

"The financial markets generally are unpredictable. So that one has to have different scenarios ... The
idea that you can actually predict what's going to happen contradicts my way of looking at the market."

"Markets are constantly in a state of uncertainty and flux, and money is made by discounting the obvious
and betting on the unexpected."

"The worse a situation becomes, the less it takes to turn it around, and the bigger the upside."

"Stock market bubbles don't grow out of thin air. They have a solid basis in reality, but reality as
distorted by a misconception." -

"I contend that financial markets never reflect the underlying reality accurately; they always distort it in
some way or another and the distortions find expression in market prices."

"Unfortunately, the more complex the system, the greater the room for error."

"Making an investment decision is like formulating a scientific hypothesis and submitting it to a practical
test. The main difference is that the hypothesis that underlies an investment decision is intended to make
money and not to establish a universally valid generalization."

"We try to catch new trends early and in later stages we try to catch trend reversals. Therefore, we tend
to stabilize rather than destabilize the market. We are not doing this as a public service. It is our style of
making money."

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Are you on a mission?
by Joshua M Brown

''It is not enough. to be industrious; so are the ants. What are you indushious about?''

-Henry David Thoreau

What are you working on? Are you on a mission? Yes, you're working hard but
are you doing something meaningful? For a company that stands for something? Do you wake up
without an alarm clock because the mission beckons?
"Never permit a dichotomy to rule yourl~fe> a dichotomy in which you hate what you do .
you can have pleasure in your spare time. Look for a situatioll in which yom work wW give
you as much happiness as your spare time. "
9
- Pablo Picasso
Does your work seamlessly blend with your life and what you want to get out of it? Does the line
blur because you love the challenge you've set before yourself? Even the low points and the small
failures along the way?
"Persistency of purpose is a power. It creates cm~fidence in others. Everybody believes in
the determined man."
- Orison Swett Marden
Have you surrounded yourself with people on the same mission, people working toward the same
purpose? You can do it alone but you don't have to. Are your ideas powerful enough to share? Are
they attracting others to your cause? Are your beliefs infectious?
"You have to have a vision. It's got to be a vision you articulate clearly andforcefully. You
can't blow an uncertain trumpet."
- Theodore Hesburgh
Have you taken the time to write out precisely what you're tryin g to accomplish? When you share
it with others, do their eyes light up? Do they get it immediately? If not, try the next draft. And the
next. Go until you can recite it like a mantra, even in your sleep. If you are not absolutely
convinced in what you're doing, who else will be? Not coworkers, not potential partners and
certainly not customers.
"No one wants to die. Even people who want to go to heaven don't want to die to get there.
And yet death is the destination we all share. No one has ever escaped it. And that is as it
should be, because Death is very likely the single best invention of Life. It is L{fe 's change
agent. It clears out the old to make way for the new. Right now the new is you, but someday
not too long from now, you will gradually become the old and be cleared away. Sorry to be
so dramatic, but it is quite h-ue.
_.. Your time is limited, so don't waste it living someone else's life. Don't be happed by dogma
- which is living with the results of other people's thinking. Don 't let the noise of others'
opinions drown out your own inner voice. And most important, have the courage to follow
your heart and intuition. They somehow already know what you huly want to become.
Everything else is secondary."
-Steve Jobs
Letter to My Nephews
By Jonathan Tepper VII~IA/VT pEP.CE~TJotoi)

You can learn a lot from books, but many things can only be learned the hard way by living, suffering and
enjoying life.

A year and a half ago, I was in a plane with very bad turbulence, and I worried that if the plane went down,
many of the lessons I've learned in life would end up at the bottom of the ocean. I wrote a letter to my
nephews for them to read when they were older. I hope they'll find it useful.

Dear nephews,

I'm writing this on a plane. The reason I started writing this was that I feared the plane might go down,
and if it went down, all the lessons I've learned in life would disappear with me. By writing this, I hope to
pass on the few lessons I've learned.

The most important lesson is that the vast majority of things y9u worry about will not bother you the next
day. A year later you will not even be able to remember them if you try. When you grow older, you will not
worry about what grades you got. You won't worry about games you lost. You won't worry about what
other people thought about you. Most of the things you worry about will never happen. Even if the worst
things that you worry about happen, life will still go on. Learn to enjoy every day, and try to enjoy it as if it
is your last. It has taken me a long time to understand this, and I wish I had understood it sooner.

Happiness is not a destination but a journey. You will never be smart enough, rich enough, have a pretty
enough girlfriend, boyfriend, husband or wife, or win enough prizes and awards. Whatever it is you want,
there is always something better. Enjoy the journey of learning, working, and living. If you enjoy the
journey, you'll probably achieve a lot more than if you focused on goals.

Money can provide security. but once you have security, more money cannot buy you more happiness. If
you show me someone who thinks money can buy happiness, I'll show you someone who has never had a
lot of money.

Things don't make you happy, but memories will always stay with you. Whatever it is that you buy, you
will soon get used to it. It will make you happy for a short while, but it will not make you happy forever.
Experiences and memories can make you happy forever. I can't even remember most of the toys I've
had in my life, but I still think of my times with Timothy and your Grandmom with great happiness and
fondness. I remember walking Timothy to school and how happy we were. I remember hugging your
Gradmom when I came home for a weekend. Those memories will never go away. The happiest memories
of my friends are my travels and dinners with them, not the things I've bought for myself. You'll remember
dinners and travels with friends and family more than any shiny things you'll ever have.

Your family is the most important thing you have in life. Friends, boyfriends, girlfriends and co-workers
come and go, but the only thing that you can always count on is your family. (If you find a friend who
is always there for you;you're extremely lucky. They exist, but they're very rare.) One day, you will have
your own family. You must love them and look after them. You will understand one day that just as your
grandparents die, your parents will as well. Strive to be a good son and daughter. One day, you will be like
your parents. Your parents are not perfect, and you will not be either. But you can be loving and be a good
son and daughter. One day you can be a good parent.

Never stop learning, and always be ready to teach yourself things you don't know. The only things you will
remember are things you care about. You will forget about all the rest. You must teach yourself and care
about what you learn. No one can teach you everything you need to know at school or university. You will
also forget most of what you study, and that is fine. As Jacques Barzun said, "Civilization is all that remains
after you have forgot all that you specifically set out to remember:'

Never live someone else's life. Find your gifts and the things that give you pleasure, develop those gifts, and
pursue them. Do what makes you happy and be great at it. You have skills and gifts that no one will ever
have or see again. If you're a businessman, build businesses. If you're a writer, write. If you're a scientist,
discover. If you do what you love and love what you do, you will work very hard, but you will enjoy every Aj\ ,I/
day. '/
 One of the things that most influenced me was something Steve Jobs once said:

When you grow up, you tend to get told that the world is the way it is and your life is just to live your
life inside the world, try not to bash into the walls too much, try to have a nice family life, have fun,
save a little money.

That's a very limited life. Life can be much broader once you discover one simple fact, and that is that
everything around you that you call life was made up by people that were no smarter than you. And
you can change it, you can influence it, you can build your own things that other people can use.
Once you learn that, you'll never be the same again.
And the minute that you understand that you can poke life and actually something will, you know
if you push in, something will pop out the other side, that you can change it, you can mold it. That's
maybe the most important thing. It's to shake off this erroneous notion that life is there and you're just
going live in it, versus embrace it, change it, improve it, make your mark upon it.

I think that's very important and however you learn that, once you learn it, you'll want to change life
and make it better, cause it's kind of messed up, in a lot of ways. Once you learn that, you'll never be
the same again.

I hope that you will find what you love and you will change the world.

Life is full of struggle, and many bad things will happen to you. This is one thing that I can guarantee you.
Most of my friends died of AIDS, and your uncle Timothy died in a car accident and your Grandmother
committed suicide after suffering from a very bad brain tumor. These things happened and cannot be
changed. Many people suffer great tragedies and live full and happy lives. Remember the people you love
and mourn them. Accept that terrible things happen, and try to live as if each day is your last with those
you love. There is nothing else you can do.

The best way to avoid anxiety, stress and unhappiness is to avoid internal contradiction. Don't think that
one thing is right and do the opposite. Listen to your conscience and obey it. Be a good person and live
according to your convictions. You cannot answer for other people, but you can always answer for yourself.
As long as you live according to your most basic beliefs, you will not have regrets or guilt. You will be able
to die happily knowing that you looked after the poor and needy, that you were loving to those around
you, and that you failed often but did your best. You will not lose a night of sleep if you always try to do
your best.

I love you very much.

Much love,

Uncle Jonathan

Nassim Taleb's Life Advice: Be Careful of Life Advice

I hesitate to give advice 'because every major single piece of advice I was given turned out
to be wrong and I am glad I didn't follow them. I was told to focus and I never did. I was
told to never procrastinate and I waited 20 years for The Black Swan and it sold 3 million
copies. I was told to avoid putting fictional characters in my books and I did put in Nero
Tulip and Fat Tony because I got bored otherwise. I was told to not insult the New York
Times and the Wall Street Journal; the more I insulted them the nicer they were to me
and the more they solicited Op-Eds. I was told to avoid lifting weights for a back pain and
became a weightlifter: never had a back problem since. If I had to relive my life I would
be even more stubborn and uncompromising than I have been.
 Seth Klarman
Billionaire value investor Seth Klarman is one of the most successful hedge fund managers of all time.
-?' Klarman, the 58-year-old founder of $27 billion Boston-based Baupost Group, ranks No. 4 on the all time
list, according to a report from fund-of-funds LCH Investments.
Since his fund's inception in 1983, he has made his investors net gains of $22.6 billion.
During his career, he's only had three losing years, including 2015. Baupost's public-investments portfolio
fell6.7% in 2015, while the fund's private investments gained 2.4%, according to an investor update seen by
Business Insider.
In his fund's year-end letter, Klarman explained what it takes to be a successful investor:
"Did we ever mention that investing is hard work - painstaking, relentless, and at times confounding?
Separating relevant signal from noise can be especially difficult. Endless patience, great discipline, and
steely resolve are required. Nothing you do will guarantee success, though you can tilt the odds
~ificantly in your favor by having the right philosophy, mindset, process, team, clients, and culture.
Getting those six things right is just about eveaything.
"Complicating matters further, a successful investor must possess a number of
seemingly contradictory qualities. These include the arrogance to act, and act decisively, and the
humility to know that you could be wrong. The acuity, flexibility, and willingness to change your
mind when you realize you are wrong, and the stubbornness to refuse to do so when you
remain justifiably confident in your thesis. The conviction to concentrate your portfolio in your
very best ideas, and the common sense to nevertheless diversify your holdings. A healthy skepticism,
hut. not blind contrarianism. A deep respect for the lessons of ltistol'y balanced by the knowledge that
things regularly happen that have never before occurred. And, finally, the integrity to admit mistakes,
the fortitude to risk making more of them, and the intellectual honesty not to confuse luck with skill."
As Klarman puts it, "You don't become a value investor for the group hugs."

10 Things I Believe About Investing

by Ben Carlson ( 1/VEAt..tfl Or CtJffJRIOIVJ'EIV.E I?J.OG)
1. I believe simple beats complex,~ simple is much harder to implement because complex will always sound
more intelligent and feel more comfortable to buy into.
2. I believe investors spend far too much time worrying about their buy or sell decisions when patiently holding
onto an investment is probably the most important aspect of investing.
3. I believe it's not your job to figure out whether legendary investors are right or wrong about the markets, but
whether their advice or predictions are relevant for your particular situation or not.
4. I believe self control can make you far more money than just about any other trait as an investor.
5. I believe any successful risk management system has to be rules-based or it won't work in practice because
trading on gut instincts is an impossible strategy that very few people can pull off consistently.
6. I believe investing should be focused less on being bullish or bearish and more on progress towards your
goals.
7. I believe that individuals spend far too much time studying billionaire fund managers and not enough time
studying normal people who have successfully retired.
8. I believe that creating a long-term investment plan about an uncertain future is never going to be perfect, but
it's still one of the most important things an investor can do.
9. I believe that paying attention to your spending and saving habits is far more important than paying attention
to the daily changes in the markets.
10. I believe that nothing about investing is ever easy, but we still make it harder than it has to be.
10 Investment Rules From Investing Legends
Submitted by Lance Roberts via ReallnvestmentAdvice.com,

10 investment lessons from some of the investing legends of our time. These time-tested rules about "risk" are
what have repeatedly separated successful investors from everyone else. (Quote source: 25IQ Blog)

1) Jeffrey Gundlach. DoubleLine

"The trick is to take risks and be paid for taking those risks, but to take a diversified basket of risks in a
portfolio. "
2l Ray Dalio, Bridgewater Associates

"The biggest mistake investors make is to believe that what happened in the recent past is likely to persist.
They assume that something that was a good investment in the recent past is still a good investment. Typically,
high past returns simply imply that an asset has become more expensive and is a poorer, not better,
investment. "
3) Seth Klarman, Baupost

"Most investors are primarily oriented toward return, how much they can make and pay little attention to risk,
how much they can lose."
4) Jeremy Grantham, GMO

"You don't get rewarded for taking risk; you get rewarded for buying cheap assets. And if the assets you bought
got pushed up in price simply because they were risky, then you are not going to be rewarded for taking a risk;
you are going to be punished for it. "
Sl Jesse Livermore. Speculator

"The speculator's deadly enemies are: ignorance, greed, fear and hope. All the statute books in the world and
all the rule books on all the Exchanges of the earth cannot eliminate these from the human animal.... "
6) Howard Marks. Oaktree Capital Management

"Rule No. 1: Most things will prove to be cyclical.

Rule No. 2: Some of the greatest opportunities for gain and loss come when other people forget Rule No. 1."
7) James Montier. GMO

"There is a simple, although not easy alternative [to forecasting]. .. Buy when an asset is cheap, and sell when
an asset gets expensive .... Valuation is the primary determinant of long-term returns, and the closest thing we
have to a law of gravity in finance."
8l George Soros, Soros Capital Management

"It's not whether you're right or wrong that's important, but how much money you make when you're right and
how much you lose when you're wrong."
9l Jason Zweig, Wall Street Journal

"Regression to the mean is the most powerful law in financial physics: Periods of above-average performance
are inevitably followed by below-average returns, and bad times inevitably set the stage for surprisingly good
performance."
10) Howard Marks, Oaktree Capital Management

"The biggest investing errors come not from factors that are informational or analytical, but from those that are
psychological."
 11
rHE!eE PIV11 flEA ,,
Richard Thaler on optimism bias po/tiY IN HE~E .Joh/EWIIE/U"

Posted by trengriffin

Richard Thaler is not only a famous economist and author, but is also part of a very successful fund.

Optimism Bias: "The 'above average' effect is pervasive. Ninety percent of all drivers think they are
above average behind the wheel." ''People are umealistically optimistic even when the stakes are high." "I
think the people who've been the most overconfident in our business in the last decade have been the
people that called themselves risk managers. And the reason is they failed to learned the primary lesson
we should have learned from when Long Term Capital Management went belly up. That is, investments
that seem unconelated can be correlated simp ly because we' re interested in it. ... the world is much more
correlated than we give credit to. And so we see more of what Nassim Taleb calls 'black swan events'-
rare events happen more often than they should because the world is more correlated. I think one lesson
we have to learn is that there's a lot more risk than we're giving credit to, a lot more what economist calls
systematic risk. I think we also have learned the lesson that we have to have better incentive structures." I
have met Thaler and find him not only to be a delightful and insightful, person but also an to be an
optimist. Optimism is good quality to have as long as it does not become a dysfunctional bias. When people talk
about optimism bias it always reminds me of a story:
OPr/fJ?I T o/ /'.ESS/111/d
A family had twin boys, whose only resemblance to each other was their looks. If one felt the temperature was
too hot, the other thought it was too cold. If one said the television was too loud, the other claimed the volume
needed to be turned up. Opposite in every way, one boy was an@ernal optimist) the other boy aQotal pessimist)
On the twins' birthday their psychologist father loaded the pessimi st's room wi th every imaginable toy and
game. The optimist's room was loaded with a huge pile of horse manure. That night the father passed by the
pessimist's room and found him sitting next to his many gifts crying bitterly.

"Why are you crying?" the father asked.

"Because my friends will be envious, I'll have to read all these instructions before I can do anything with these
toys and games, I will constantly need new batteries, and they will eventually get broken." answered the
pessimist twin.

Passing the optimist twin's room, the father found him dancing for joy in the middle of the pile of manure.
"What are you so happy about?" he asked.

The optimist twin boy replied, "There just must be a pony in here somewhere!"

I RECOt'\MfN D OUR WE'LL TURN YOUR. I5IT

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Estee Lauder on selling

"I have never worked a day in my life without selling. If I believe in something, I_sell it, and I sell it hard."
The famous makeup entrepreneur knows that no matter what product or service you have, it needs to be
sold. There is no such thing as an entrepreneur with no selling skills.
 A Dozen Famous Lines about Investing from the Movies
Posted by trengriffin Wml t:-HMI.IE IYJtl11,61liNSI611TS
I am working on a new "mental models" series for the blog. The writing is taking a bit longer than I thought, so
in the interim here is something light. I have paired each movie quote with an appropriate Charlie Munger
quote.

1. "Buy low, sell high. Fear? That's the other guy's problem." Louis Winthorpe III. Trading Places.

Charlie Munger: "Look for more value in terms of discounted future cash flow than you're paying for. Move
only when you have an advantage. It's very basic. You have to understand the odds and have the discipline to
bet only when the odds are in your favor."

2. "Don't you see what's happening? Potter isn't selling. Potter's buying! And why? Because we're
panicking and he's not. That's why. He's picking up some bargains." George Bailey. It's a
Wonderful Life.

Charlie Munger: "For a security to be mispriced, someone else must be a damn fool. It may be bad for the
world, but not bad for Berkshire."

3. "OK, first rule of Wall Street- Nobody- and I don't care if you're Warren Buffett or Jimmy
Buffett - nobody knows if a stock is going up, down or sideways, least of all stockbrokers. But we
have to pretend we know." Mark Hanna. The Wolf Of Wall Street.

Charlie Munger: "People have always had this craving to have someone tell them the future. Long ago, kings
would hire people to read sheep guts. There's always been a market for people who pretend to know the future.
Listening to today's forecasters is just as crazy as when the king hired the guy to look at the sheep guts. It
happens over and over and over."
....~.
'INVESTMENT
BRoKER
A

"First the good news. Textiles are up Chemicals

are up and Electricals are up. The bad news Is you
don't have any."

4. "For twenty dollars I can tell you a lot of things. For thirty dollars I can tell you more. And for
fifty dollars I can tell you everything." Madame Ruby. Pee-Wee's Big Adventure.

Charlie Munger: "I know one guy, he's extremely smart and a very capable investor. I asked him, 'What returns
do you tell your institutional clients you will earn for them?' He said, '20%.' I couldn't believe it, because he
knows that's impossible. But he said, 'Charlie, ifl gave them a lower number they wouldn ' t give me any ~~~
money to invest!' The investment-management business is in sane." r}~ ~

5. "There's not a lot of money in revenge." Inigo Montoya. 1'be Princess Bride. V
Charlie Munger: "There's an old saying, 'What good is envy? It's the one sin you can't have any fun at.' It's
100% destructive. Resentment is crazy. Revenge is crazy. Envy is crazy. If you get those things out of your life
, early, life works a lot better."
 6. "A fool and his money are lucky enough to get together in the first place." Gordon Gekko. Wall
Street.
Charlie Munger: "Well, some of our success we predicted and some of it was fortuitous. Like most human
beings, we took a bow."

7. "Danny Moses: "How can the banks let this happen?" Jared Vennett: "It's fueled by stupidity.
Mark Baum:'But that's not stupidity. That's fraud." Jared Vennett: "Tell me the difference
between stupid and illegal and I'll have my wife's brother arrested." The Big Short.

Charlie Munger: "It is remarkable how much long-term advantage people like [Warren Buffett and myself]
have gotten by trying to be consistently not stupid, instead of trying to be very intelligent."

8. "And there is no such thing as a no-sale call. A sale is made on every call you make. Either you
sell the client some stock, or he sells you on a reason he can't. Either way, a sale is made. The only
question is, Who's gonna close? You or him?" Jim Young. Boiler Room.

Charlie Munger: "If you take sales presentations and brokers of commercial real estate and businesses -I'm
70 years old, I've never seen one I thought was even within hailing distance of objective truth. 'Incentive-
caused bias' causes this terrible abuse. And many of the people who are doing it you would be glad to have
married into your family compared to what you ' re otherwise going to get."

9. "That's all the market is, one giant casino." Nick Leeson. Rogue Trader.

Charlie Munger: "The model I like to sort of simplify the notion of what goes on in a market for common stocks
is the pari-mutuel system at the racetrack. If you stop to think about it, a pari-mutuel system is a market.
Everybody goes there and bets and the odds change based on what's bet. That's what happens in the stock
market."

10. Navin R. Johnson: '"I've already given away eight pencils, two boola dolls, and an ashtray, and
I've only taken in fifteen dollars.' Frosty: "Navin, you have taken in fifteen dollars and given away
fifty cents worth of crap, which gives us a net profit of fourteen dollars and fifty cents. Navin R.
Johnson: "Ah ... It's a profit deal. That takes the pressure off." The Jerk.

Charlie Munger: "We're trying to buy businesses with sustainable competitive advantages at a low- or even a
fair price. The reason the professors teach nonsense is that if they didn't, what would they teach the rest of the
semester? 'Ieaching people formulas that don't really work in real life is a disaster for the world."

11. Doyle Lonnegan: "Your boss is quite a card player, Mr. Kelly; how does he do it?" Johnny
Hooker: "He cheats." The Sting.

Charlie Munger: "People need to ask, 'How do I play the hand that has been dealt me?' The world is not going
to give you extra return just because you want it. You have to be very shrewd and hard working to get a little
extra. It's so much easier to reduce your wants. There are a lot of smart people and a lot of them cheat, so it's
not easy to win."

12. "Each man's life touches so many other lives. When he isn't around he leaves an awful hole,
doesn't he?" Clarence the Angel. It's a Wonderful Life.

Charlie Munger: "That I've profited from being shrewd with money is not by itself satisfying to me. To atone, I
teach and try to set an example. I would hate it if the exam le of my life caused people to pursue the pas ive
ownership of pieces of paper. I think lives so spent are disastrous lives. I think it' s a etter career if you help
build something. I wish I'd built more, but I was cursed at being so good at stock picking. 'The man is the
prisoner of his talents.' You can laugh, but I'll bet this room is full of pe pie who are prisoner of their talents .
It tends to be the human condition."
 Two Star Managers and the Wheel of Fortune
Patrick O'Shaughnessy
Here is an idea that is doomed to fail: a podcast or interview series with 2-star fund managers. We hear about strategies,
portfolio managers, and asset classes after the fact-when they've delivered performance numbers that make our mouths water.
We cannot blame the financial complex for focusing on strongest returns: it leads to more interesting stories, more sales, more
page views, more ... pick your metric.
@
Interviewing, profiled, and buying at performance peaks is the central problem in active investing along the entire chain: from
end/individual investor, to intermediary, to asset. manager. Styles and strategies tend to be cyclical, but we are humans and
we extrapolate in straight lines, not in circles. The entire industry is branded with "past performance is not indicative of
future results" because we are wired to think that way: in most other places, past performance is indicative of future results!

When I said I would love an interview series with 2-star fund managers, the most common response was "just go watch the 5-
star interviews from a few years ago." That is funny, because it is so often true. We know that strategies-and the portfolio
managers behind them-mean revert. We see these four stages: 1) I reign (5-stars!) 2) I reigned (2-3 stars) 3) my reign is
finished (massive outflows) 4) I shall reign (performance comeback).
J
Picture this big wheel of fortune, because it sits-always turning-behind financial markets. 5-star managers (or, in institutional-
speak, top quartile/decile managers) "reign." Some reigns last a long time, but the numbers show that precious few last
forever--especially when AUM grows and reduces one's potential edge. When a manager reigns, it is usually because of
strong performance, which brings spoils: assets, personal wealth, clout, and requests for interviews. Hidden behind the spoils:
scrutiny, attention, competitors who mimic, steal, or improve your strategy, and an increased probability that the strategy will
work less well or not at all in the near- to mid- term future. This all fuels the wheel! Having lived all of this myself, I can say
with a confidence earned through several spins of the wheel that the most important things, for any strategy/portfolio manager
are:

@ro remain extremely disciplined by working a system.

Having a system is the most important thing, but that is pretty common these days. Abandoning a system happens most often at
the top and bottom of the wheel. At the top, many managers who relied on less liquid/smaller cap opportunities to achieve
strong performance move up the capitalization spectrum, or launch new strategies (spreading/diluting their attention) to
accommodate more assets under management. (Side note: I have no clue how any non-quant could manage multiple
strategies/portfolios and succeed).' At the bottom, any system will feel broken-out of date and out of touch. Which leads to ...

@can withstand increased external pressure causes by periods of underperformance

This should be 1A), because it is related to discipline. The pressure to change your stripes during periods of underperformance
is immense. In my experience, managers have more resolve than their investors (on average-I know many wonderful
exceptions to this rule). During initial drawdowns, investors understandably want to know what managers are doing to "fix"
the problem. The problem is usually that there is nothing to fix. Even the best system will fail very often. Just a little more
than 50% of value stocks beat the market, on average. This is so frustrating, because, in almost every other pursuit, failure
means something can be improved upon. In investing, you are guaranteed to have lots of failures, and most of those
failures say very little about the quality of the system that produced them! What produces so many awful investor
outcomes is mistaking a single failed investment for a failed system. --............_ .. ___/
' - - - (oN1'!J
@Humility
When I see hubristic PMs, my first thought is always: they have not dug deep enou~h. I am often reminded, studying financial
markets, of Umberto Eco's concept of the "anti-library:" a collection of books not yet read. What I find is that the more I dig-
on a factor, a stock, a strategy, whatever- the less I know. Sure I learn as I dig, but for every one thing I learn, I become aware
of three new things that I don't know. I know a few incredibly talented, deep fundamental stock pickers who have had great
and sustained success. They are confident, but they are also insanely humble-because they realize how much they don't or
can't know.

@A willingness on the part of the portfolio manager(s) to communicate and educate as much as possible, especially
during tough times.
For all involved, maybe this is the most important thing. To survive a full turn of the wheel, you need true conviction. The only
way for investors to gain that conviction is to understand the strategy. This requires a lot of care, because there is always more
to learn. This is all I do and all I think about, yet still there are still nuances I find, almost every time I go looking. This means
that for an investor to stick with a strategy-especially an active once which is unique enough to make 'it worth the investor's
while-net of fees-they need to understand it deeply.

{5)Be open to change, which means admitting you don't do everything perfectly
I always hear the joke that allocators/investors in the industry love innovation but hate change. Again, funny because it's true.
Investing strategies need an immutable underlying set of principles-a bedrock philosophy-like, say, value investing. For me,
it's that certain factors drive returns (value, momentum, shareholder yield). But the implementation of that philosophy can and
should evolve and improve. We can measure "value" far more accurately than we could 15 years ago. Constant tinkering is
bad, but smart, infrequent improvements almost always make sense.

***
While an interview series with 2-star or bottom quartile managers may be doomed to failure, it may prove to be a great hunting
ground for managers you want to invest with-provided they have attributes like the ones listed above (humility is all but
assured ;). The same system that makes you feel brilliant at the top will make you feel like a moron at the bottom, and
the wheel will keep turning. Markets are incredibly hard to beat. You can probably only gain a small edge. Letting that edge
work is the hardest part.

'I'd be a bum on the street with a tin cup if the markets were efficient.. ... Investing in a market where people believe in
efficiency is like playing bridge with someone who has been told it doesn't do any good to look at the cards'. Warren
Buffett

'Conventional wisdom results in conventional results'. Mario Gabelli

'We have embraced the 21st Century by entering such cutting-edge industries as brick, carpet, insulation and paint.
Try to control your excitement'. Warren Buffett

'You must never confuse genius with a bull market'. Nick Leslau

'I made my money by selling too soon'. Bernard Baruch

'Trading has been, and always will be, a hard way to make an easy living'. Jeffrey Silverman

'There are old traders around and bold traders around, but there are no old, bold traders around'. Thomas Huxley

'When someone says 'it's not about money', it's about money'. H.L.Mencken

'Long periods of prosperity usually end in scandal'. George Taucher

 The 3 Most Important
Words in Investing
11
/-I~Al>J HE WotJ, fA!J..1 H Dl~ o/l. .

By Morgan Housel I

You've all heard stories about professional investors underperforming index funds, but economists Ron Acquits, Lutz Kilian, and
Robert Vigfusson took this humiliation to the next level. The trio showed that forecasts of the price of oil one year out made by the
Energy Information Agency and survey firm Consensus Economics were no more accurate than just assuming whatever oil's price is
today is what it will be next year. Literally, not having any forecast was as accurate as a professional forecast. What is true for oil is
undoubtedly true for economic growth, corporate earnings and industry trends. Most of us can't stand the thought of it, but anyone
looking honestly at the evidence knows we are spectacularly awful at predicting the future.

This might seem disturbing to investors. How do you invest in the future while holding a nearly fatalist view that we can't predict the
future?

Luckily, the world's smartest investment minds came up with an answer, and it might contain the three most important words in
investing It's called the margin of safety.

Margin of safety is simply the distance between your predictions coming true and needing those predictions to come true. You can
still try to predict the future, but a margin of safety gives you room for error to be wrong.

Benjamin Graham summed it up when he said, "The purpose of the margin of safety is to render the forecast unnecessary."

You don't want to buy a stock you think could grow earnings at 10% a year but needs to in order to make it a good investment. You
want to buy the stock that could grow earnings at 10% a year but would still make a decent investment if it only grows earnings by
5%, or 2%, with anything beyond that being cream cheese.

Take this example from Warren Buffett biographer Alice Schroeder. Schroeder describes how Buffett analyzed a stock he purchased
in the 1960s in a company called Data Documents. Rather than forecasting what the company might earn in the future, Buffett looked
at the company's current figures and asked if he could get a good return even if they deteriorated. "There was a big margin of safety
built into these numbers," Schroeder says. The company "had a 36% profit margin. [Buffett] said, 'I'll take half that."'

In the end, Data Documents did fan~astic, and Buffett made a fortune, but that's not what's important. What made the company a great
investment is that it didn't need to do fantastic for Buffett to still have done all right. Heads he won, tails he did OK.

The whole concept of margin of safety is possible because there's a difference between the price of a stock and the value of a
company. It pops up when you don't have to pay a high price for the possibility of good news, or when possible bad news is already
priced in. This what Graham meant when he wrote: "The margin of safety is always dependent on the price paid. It will be large
at one price, small at some higher price, nonexistent at some still higher price."

This goes beyond stock-picking. Those who save the exact amount of money they think they'll need to retire are one bear market,
hospital visit, or divorce away from trouble. Anyone who thinks they have ultimate job security, or don't need to save because they
have an inheritance coming, or think they can handle a lot of debt because a Christmas bonus awaits will eventually learn that the
quote, "You plan, God laughs," can be painfully true.

You're going to be wrong a lot. It's part of investing, and it's part of life. Insisting on having a wide gap between what you think will
happen and what could happen if you're wrong is the only way to hedge against it
Richard Branson's lessons on leadership
2015-09-08 04:45:33.800 GMT

By Jamie Freed
(!)surround yourself with good people and delegate well
Sir Richard says it is very important to know your strengths and your limits and to not try to do too much yourself.
Instead, you need to get the best people with great ideas to join your team - and then avoid second-guessing them all
the time.
"Sometimes they will fall flat on their face," he says.
"Sometimes they will do incredible things. Obviously I have been at it for a long time. Based on experience, sometimes I
can say whether I like something or not based on many years of doing things. But surround yourself with great people.
"And delegate. I think too many people are building companies, they are not delegating. The absolute key is early on
as you are building companies try to put yourself out of business. Find one or two people that are better than you to do
everything."

(Y It's okay to fall flat on your face, as long as you get back up again
Sir Richard views failure as a learning experience. He points to the Virgin Cola product, launched in 1994, as an
example. The product did well in the UK market for around 18 months, but that attracted the attention of Coca-Cola,
which had deep pockets with which to fight back. Suddenly, Virgin Cola disappeared from the shelves of major retailers
like Tesco.
"A lot of people fall flat on their face," he says. "The key in life is to learn from that experience and pick yourself up
and keep reinventing yourself until you succeed. Most successful people have. It is learning from that and not giving up
when it happens. Hopefully ultimately you come out on top."

@Make sure you have a better product than the incumbent

Sir Richard says the key lesson from the Virgin Cola debacle was to always ensure you have a product that is "much,
much better" than your competitor.
"Obviously with a soft drink there is not much you can do to differentiate it," he says. "When British Airways tried to
do the same thing to Virgin Atlantic because the quality of our product was better they couldn't do it. Or when Qantas
tried to do it to Virgin Australia, they inflicted so much damage on themselves to themselves that they finally backed up.
They even had to go begging to their government, having lost hundreds of millions of dollars trying to drive us out of
business. The main thing was to make sure we kept the quality up."

@oo anything you can to promote your business for free

Sir Richard says Sir Freddie Laker, who had gone bankrupt fighting British Airways, had an important bit of advi<;:e for
the launch of Virgin Atlantic and its fight against a deeper-pocketed rival.
"He said you have got to use yourself to let people know about your business," Sir Richard says. "And don't spend
tonnes of money on advertising but go out, make a fool of yourself, do whatever it takes to get your message out there.
So I think for anyone who is starting out in business, if you have got the best product, you have got to let people know
about your product and get out there and market it cleverly."

Sheryl Sandberg on leadership

Facebook's COO says, "Leadership is about making others better as a result of your presence and making
sure that impact lasts in your absence." You want to make the company better, and leave it that way for
your successor. That should be the goal of any executive.

Irene Chang Britt on making mistakes

"Not that I would have listened, but I wish I'd known that it was okay to make mistakes earlier in my
career. I went on to make some real doozies but I wish that rather than being embarrassed, which I was, I
appreciated it was all part of learning and developing on the job." The CSO of Campbell Soup Company
 BooN JNEI.F ''1.1-ER~
40 books every self-respecting investor needs to read
By Michael Batnick -If you're looking for books on investing, this is a good place to start.

"Reminiscences of a Stock Operator" - Edwin Lefevre, 1923

"Security Analysis" -Benjamin Graham, David Dodd, 1934
"Where Are the Customers' Yachts?"- Fred Schwed Jr., 1940
"The Intelligent Investor"- Benjamin Graham, 1949
''The Great Crash, 1929" -John Kenneth Galbraith, 1954
"Common Stocks and Uncommon Profits"- Philip A. Fisher, 1958
"The Money Game" - George Goodman, 1967
"A Random Walk Down Wall Street"- Burton Malkiel, 1973
"Manias, Panics, and Crashes: A History of Financial Crises"- Charles Kindleberger, 1978
"The Alchemy of Finance" -George Soros, 1987
"Market Wizards"- Jack Schwager, 1989
"Liar's Poker"- Michael Lewis, 1989
"101 Years on Wall Street, an Investor's Almanac"- John Dennis Brown, 1991
"Beating The Street"- Peter Lynch, 1993
"Stocks for the Long Run"- Jeremy Siegel, 1994
"What Works on Wall Street"- James O'Shaughnessy, 1997
"The Essays of Warren Buffett: Lessons for Corporate America"- Lawrence Cunningham, 1997
"Against the Gods: The Remarkable Story of Risk" -Peter Bernstein, 1998
"Common Sense on Mutual Funds"- Jack Bogle, 1999
"Devil Take the Hindmost: A History of Financial Speculation" -Edward Chancellor, 1999
"When Genius Failed" -Roger Lowenstein, 2000
"One Up On Wall Street"- Peter Lynch, 2000
"Fooled By Randomness: The Hidden Role of Chance in Life and in the Markets"- Nassim Nicholas Taleb, 2001
"Confessions of a Street Addict" -Jim Cramer, 2002
''The Four Pillars of Investing: Lessons for Building a Winning Portfolio"- William Bernstein, 2002
"Winning the Loser's Game"- Charles Ellis, 2002
"Bull: A History of Boom and Bust 1982-2004"- Maggie Mahar, 2004
"Poor Charlie's Almanack: The Wit and Wisdom of Charles T. Munger"- Peter Kaufman, 2005
"All About Asset Allocation" - Rick Ferri, 2006
"Your Money and Your Brain"- Jason Zweig, 2007
"Bailout Nation" -Barry Ritholtz, 2009
''The Big Short"- Michael Lewis, 2010
''The Quants"- Scott Patterson, 2010
"More Money Than God"- Sebastian Mallaby, 2010
"The Most Important Thing"- Howard Marks, 2011
"Backstage Wall Street"- Josh Brown, 2012
"Quantitative Value"- Wesley Gray, Tobias Carlisle, 2012
"Millennia} Money: How Young Investors Can Build a Fortune"- Patrick O'Shaughnessy, 2014
"A Wealth of Common Sense: Why Simplicity Trumps Complexity in Any Investment Plan"- Ben Carlson, 2015

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 The top Chuck Norris Facts.

Chuck Norris's blood type is KO

There used to be a street named after Chuck Norris, but it was changed because nobody
crosses Chuck Norris and lives.
Chuck Norris has already been to Mars; that's why there are no signs of life.
When Alexander Bell invented ttie telephone he had 3 missed calls from Chuck Norris

Fear of spiders is aracnaphobia, fear of tight spaces is chlaustraphobia, fear of Chuck Norris is
called Logic

Chuck Norris counted to infinity - twice.

Chuck Norris is the reason why Waldo is hiding.
Chuck Norris can slam a revolving door.

Death once had a near-Chuck Norris experience

When the Boogeyman goes to sleep every night, he checks his closet for Chuck Norris.
Chuck Norris can win a game of Connect Four in only three moves.
Chuck Norris will never have a heart attack. His heart isn't nearly foolish enough to attack
him.

Chuck Norris once got bit by a rattle snake ........ After three days of pain and agony
.................. the rattle snake died

Chuck Norris can cut through a hot knife with butter

There is no theory of evolution. Just a list of animals Chuck Norris allows to live.
When Chuck Norris does a pushup, he isn't lifting himself up, he's pushing the Earth down.

Chuck Norris doesn't wear a watch. HE decides what time it is.

Chuck Norris can light a fire by rubbing two ice-cubes together.
The original title for Alien vs. Predator was Alien and Predator vs Chuck Norris. The film was

cancelled shortly after going into preproduction. No one would pay nine dollars to see a movie
fourteen seconds long.

Chuck Norris doesn't read books. He stares them down until he gets the information he wants.
Chuck Norris made a Happy Meal cry.

Some people wear Superman pajamas. Superman wears Chuck Norris pajamas.
Chuck Norris has a grizzly bear carpet in his room. The bear isn't dead it is just afraid to
move.
 If at first you don't succeed , you're not Chuck Norris.
When Chuck Norris was born, the only person who cried was the doctor. Never slap Chuck
Norris.
Google won't search for Chuck Norris because it knows you don't find Chuck Norris, he finds
you .
Chuck Norris played Russian Roulette with a fully loaded gun and won.
Chuck Norris can touch MC Hammer
A Handicapped parking sign does not signify that this spot is for handicapped people. It is
actually in fact a warning, that the spot belongs to Chuck Norris and that you will be
handicapped if you park there.
What was going through the minds of all of Chuck Norris' victims before they died? His shoe.
Everybody tries to be perfect ..... Perfection tries to be Chuck Norris
Chuck Norris can speak braille.
Chuck Norris can divide by zero
Chuck Norris can tie his shoes with his feet
Chuck Norris invented black. In fact he invented the entire spectrum of visible light. Except
pink. Tom Cruise invented pink.
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