In March 2020, when the Sensex broke below the 28,000 level due to the onset of the Covid-19 crisis, I wrote a post on how I was investing my money through the crisis.
Today, exactly 18 months later, the Sensex has touched the 60,000 mark, or about 120% up from March 2020 lows, and another take on how I am investing my money through this excitement Got down to write the post.
But then I stopped, because nothing has changed with regards to “how I invest,” other than my stocks performing just as well as everyone else’s.
I quickly changed my mind for today’s post, and thought why not share with you some of the most important “sanity-check” lessons I’ve learned from some of the smartest investors around.
So, here are some relatively unknown but timeless quotes from some of the investing greats that have served me well and stayed grounded over the years, and can also give you great lessons that should help you take stock investing off the current screw. How should one look, and not give in mind that such times are encouraged.
Don’t just read these quotes. Stop and think about them. Maybe, write them down by hand in your notebook so that you remember them for a long time. As you will realize when reading them, they contain the essence of many investment books.
Are you moving, or is it the pond?
Bull market speaks over people’s heads. If you are a duck on a pond, and it is rising because of the rain, you begin to go up in the world. But you think it’s you, not Pond.
no god wants you to be rich
Once a bull market is underway, and once you get to the point where everyone has made money, no matter what system they follow, a crowd is drawn into the game that will sway interest rates. And is reacting not to profit but to the fact that being out of stock seems like a mistake. Basically, these people supersede a party-I-can-miss-the-party factor on top of the fundamental factors driving the market. Like Pavlov’s dog, these ‘investors’ learn that when the bell rings – in this case, the one that opens the New York Stock Exchange at 9:30 a.m. – they are fed. Through this daily reinforcement, they become convinced that there is a God and that He wants them to become rich.
~ Warren Buffett
things don’t get better (or worse) forever
Early in my career, an experienced investor told me about the three phases of a bull market. Now I will share them with you. First, when some forward-looking people begin to believe that things will get better. Second, when most investors realize a correction is actually taking place. Third, things will be forever better when everyone concludes. Why would someone waste time trying for a better description? says it all. It is necessary that we understand its importance.
~ Howard Marks
Know what ‘you’ believe in
When prices go up enough, everyone believes in something or the other, even if it’s the only one who believes in it.
~ Adam Smith, The Money Game
Survival is the only way to wealth
Survival is the only way to wealth. You should try to get the maximum profit only when the losses do not threaten your existence and you can earn if you have a compelling future need for the additional profit.
~ Peter Bernstein
There is only one aspect of the stock market
There is only one side of the stock market; And it is not on the side of the bull or the bear, but on the right side.
~ Jesse Livermore
buy cheap, never go bad
My experience teaches me that by far the biggest losses have been caused to investors through buying securities of substandard quality under favorable normal conditions.
~ Benjamin Graham
just don’t suck
As a runaway bull market persists, its relentless vacuum cleaner eventually sucks it all up. Investors who are skeptical about perceived overvaluation are forced to watch as their career prospects are melting and security prices are melting. New rationalizations disguised as arguments enter a higher level of discourse to justify jumping, or crawling, despite despising it when dozens of percentage points lower. The feeling of fear and acrophobia is then replaced by a sense of giddiness and disorientation of finally being on track to make money with the crowd and not feeling isolated in the creaky valueland.
~ Paul Singer
Think of your wealth like your children
Your wealth is like your children – the primary link between your present and your future. You should try to think about it that way. You want your children to have independence but you also want them to be good people who can take care of themselves. You don’t want to blow it up, because you don’t get a second chance. When you invest, it is not your money today, it is your future that you are actually managing.
~ Peter Bernstein
* * *
“If we’re facing in the right direction, we just have to keep going,” A Buddhist proverb goes.
It reflects the essence of how we can train ourselves to be calm and patient in life and investing our hard earned money, no matter what the situation.
When excitement or fear is high, don’t run with it. Instead, keep a calm mind, think things through and be patient. Avoid hasty decisions and play according to your plan.
Things go bad after good times, just as they are good after bad. But if you put your sanity before their good or bad, you won’t be overly excited or upset when they actually do.
This should be a wise investment.