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The best quote on investing that I have read in some time

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December 01, 2012 – Comments (3)

Hooray, I can finally post in CAPS using my iPad.  While I'm not a huge fan of typing on this thing, it sure beats lugging out my laptop and firing it up.  I have a feeling that this will make me a much more frequent poster here.  CAPS blogging never worked on my old 1st generation iPad, but I am now using my new renta display iPad instead. I'm a pretty simple person, I didn't really need the upgrade, but Grandma and Grandpa live in Memphis and they like to FaceTime with the kids so I needed the camera on the new one.  As an added bonus, this thing is lightning quick compared to the old one.  A big you're welcome to all of the Apple shareholders out there in CAPS ;).

 I wanted to take a second to share this awesome quote that I just read on investing. I just started a new book called "The Value Investors. Lessons from the Worls's Top Fund Managers" by Ronald W. Chan. The first profile in it is on the famed value investor Walter Schloss, a friend of Warren Buffetts and a disciple of Ben Grahm.

Here's an amazing quote from Schloss: 

"Besause I don't like stress and prefer to avoid it, I never focus too much on market news and economic data. They always worry investors! Besides, I am not good at market timing, so when people ask me what I think the market is doing, their guess is as good as mine.". Instead, he said, he concentrated primarily on the price of a stock and it's value, an exercise he has greater confidence "

Awesome. I find myself watching the "real" news less and less these days. The only news I seem to even watch or read any more is things like Yahoo Finance and Seeking Alpha's breakfast headlines. I can gladly do without all of the negativity of the news, particularly the local news.

Now some will say that this quote is outdated and that things are different today.  i see their point, but the problem with looking at what one thinks the overall economy is going to do and attempting to apply it to your portfolio is a very difficult game to play. Not even Nobel Prize winning economists seem to be able to predict the economy with any regular success so I don't see why I would be able to.  Take the recent period starting in around 2007 for example, a TON, of really smart people felt like we were all doomed and pulled out of the market at exactly the wrong time, only to miss the huge gains over the next several years.  I'm not saying to completely ignore trends like demographics, new technology, etc just that trying to time the overall market seems like a fool's game.  There will be times when the market is expensive in general, but there's usually some bargains out there somewhere.

Schloss's investment style definitely withstood the test of time. He lived through the Great Depression and his fund provided an amazing annualized return of 21% before fees from 1956 through 2002. I believe that he invested successfully through something like seven recessions, so not timing the market seems to work well over time.
Wow this does work better, I can now scroll up and down in the post window when I couldn't before.

Thanks for reading everyone.  I'd love to hear your comments.  Have a good one. 

Deej 

3 Comments – Post Your Own

#1) On December 01, 2012 at 3:29 PM, valuemoney (< 20) wrote:

I live by the quote and everyone should read it understand it. Great post! True investors will love the quote and traders will hate it. Either is fine with me I just prefer investing not trading so that is why I like the blog so much. Thanks for the post!

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#2) On December 01, 2012 at 3:31 PM, valuemoney (< 20) wrote:

O and can't you type by voice on you IPAD?

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#3) On December 02, 2012 at 10:04 AM, TMFDeej (99.25) wrote:

Thanks valuemoney.  Wow, you're #4 in CAPS right now.  What's your secret :)?

You can type by voice in the new iPad, but it only works so-so with kids yelling and he television blasting in the background ;) .

Deej 

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