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Collections of Value Investing articles, interviews and videos, especially on Warren Buffett and Charlie Munger and articles from various disciplines to build "Latticework of Mental Models"
Tuesday, June 14, 2011
Free Capital: How 12 private investors made millions in the stock market
Excellent written book by Guy Thomas on 12 private investors who become financial independent through investing. This is great encouragement for all private investors.
All of them have different strategies, but they become successful through swimming their own races and continuously sharpening and improving their skills.
Some great quotes:
The scarcest resource for successful investors is not money but attention: how to manage the trade-off between time and rationality to best effect. There is not time in life to find out everything about every potential investment. Investment skill consists not in knowing everything, but in judicious neglect: making wise choices about what to overlook.
In careers or in investment, it helps enormously to pick the right train – choose a field with long-term secular growth.”
“Most investors would have better performance if they thought more and did less. One of the great tricks in investment is learning to be happy doing nothing.”
“A market doesn’t peak until the majority is convinced it is going to move higher, and it doesn’t bottom until the majority believes it must go lower.”
Portfolio investment is a zero-sum game in which the winners are the players with an informational or analytical edge.
After half a century, he thinks that there are “only two keys to long-term investment success: common sense and patience
“A consensus of expert opinion is not useful in investment, because it’s already discounted by current market prices. That is not true in other fields – medicine or law or even plumbing.
“Reading a biography of Bernard Baruch made a strong impression on me. He was a plunger – that was how he made his fortune. [Gerald M.] Loeb’s The Battle for Investment Survival makes the same point: put all your eggs in one basket, and watch the basket. It made sense to me: to make a large fortune from a small one, you need to be a plunger.”