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Investment Literatures and Links

Jan 02 2017

Top Investing Quotes

    Warren Buffett :

  • I prefer to keep all my eggs in one basket and watch that basket closely.
  • Diversification is a protection against ignorance. It makes very little sense for those who know what they’re doing.
  • Price is what you pay. Value is what you get.
  • Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market.
  • Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.
  • Risk comes from not knowing what you’re doing.
  • Be fearful when others are greedy. Be greedy when others are fearful.
  • Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.
  • I’d be a bum on the street with a tin cup if the markets were always efficient.
  • The dumbest reason in the world to buy a stock is because it’s going up.
  • History tells us that leverage all too often produces zeroes, even when it is employed by very smart people.
    Benjamin Graham :

  • In my nearly fifty years of experience on Wall Street, I’ve found that I know less and less about what the stock market is going to do but I know more and more about what investors ought to do; and that’s a pretty vital change in attitude. The first point is that the investor is required by the very insecurity ruling in the world of today to maintain at all times some division of his funds between bonds and stocks.
  • Individuals who cannot master their emotions are ill-suited to profit from the investment process.
  • The investor’s chief problem – and even his worst enemy – is likely to be himself.
  • Basically, price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal. At other times he will do better if he forgets about the stock market and pays attention to his dividend returns and to the operating results of his companies.
    Seth A. Klarman :

  • The foibles of human nature that result in the mass pursuit of instant wealth and effortless gain seem certain to be with us forever. So long as people succumb to this aspect of their natures, value investing will remain, as it has been for 75 years, a sound and low-risk approach to successful long-term investing.
  • Speculators are obsessed with predicting–guessing–the direction of stock prices. Every morning on cable television, every afternoon on the stock market report, every weekend in Barron’s, every week in dozens of market newsletters, and whenever businesspeople get together, there is rampant conjecture on where the market is heading.
  • As Buffett has often observed, value investing is not a concept that can be learned and applied gradually over time. It is either absorbed and adopted at once, or it is never truly learned.
  • Investors believe that over the long run security prices tend to reflect fundamental developments involving the underlying businesses.
  • The real secret to investing is that there is no secret to investing.
  • Every important aspect of value investing has been made available to the public many times over, beginning in 1934 with the first edition of Security Analysis.
    Sir John Marks Templeton :

  • It is impossible to produce a superior performance unless you do something different from the majority.
  • Bull markets are born in pessimism, grow on skepticism, mature on optimism and die on euphoria.
  • There’s only one reason a share goes to a bargain price: Because other people are selling. There is no other reason. To get a bargain price, you’ve got to look for where the public is most frightened and pessimistic.
  • People are always asking me where the outlook is good, but that’s the wrong question. The right question is: Where is the outlook most miserable? The obvious application of this concept in practice is to avoid following the crowd.

Written by Hengfu Hsu · Categorized: Financial Tips, Investment Literatures and Links

Jul 31 2013

Proven Stock Investment Methods

Here we collect powerful techniques for anyone interesting in systematic and emotionless stock investment portfolios through number crunching.

Classic Papers

Just copy and paste to Google search box to locate the paper.

  • A Conversation with Benjamin Graham, Financial Analysts Journal, 1976.
  • Investment Performance of Common Stocks in Relation to Their Price-Earnings Ratios: A Test of the Efficient Market Hypothesis, S. Basu, The Journal of Finance, 1977.
  • The Relationship Between Return and Market Value of Common Stocks, Rolf W. Banz, Journal of Financial Economics, 1981.
  • The Cross-Section of Expected Stocks Returns, Eugene F. Fama and Kenneth R. French, The Journal of Finance, 1992.
  • Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers, Joseph D. Piotroski, Journal of Accounting Research, 2000.

Books

Click the image to go to Amazon to review the book.

Written by Hengfu Hsu · Categorized: Investment Literatures and Links · Tagged: stocks, value investing

Jan 18 2010

Value Investing Books

The global bear market from 2008 to 2009 were one of the worst in history, traditional asset allocation approach were proven to be deadly wrong for retirement accounts since simultaneously all assets went down heavily and none of the asset classes can recover quickly back to previous high when the crisis was over. The only thing continues to weather the storm well and can quickly recover from bear market draw down and make equity high is value investing approach – buy quality investments at low price and sell when they become expensive.

One of the best value investing books written for 8 year old kids to 80 year old retirees is “The Little Book That Beats The Market” by Joel Greenblatt, who uses a simple story to explain an easy yet powerful magic formula. Here are some quotes from Chapter 11 of the book: “Choosing individual stocks without any idea of what you’re looking for is like running through a dynamite factory with a burning match. You may live, but you’re still an idiot.” “Most people have no business investing in individual stocks on their own.”

Another book offering timeless quantitative value investing strategies is from James O’Shaughnessy: “What Works on Wall Street” The price-to-sales ratio strategy revealed in his 1997 book proves again to be a run-away winner in 2009 recovery.

Written by Hengfu Hsu · Categorized: FAQ, Investment Literatures and Links · Tagged: stock, value investing

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