Quotes in Finance

I like quotes a lot as they condense information into one easy to remember sentence, either using images or repeating of words / sounds.

These quotes are one of my favourites in finance / investing and in addition to the quotes, I’ve added some context.

Quotes might be from some famous person, they are all NOT mine!

Past returns do not guarantee future results

This is always used in financial advice, that when looking on past returns you cannot interpolate it to the future. So it says: There is no guarantee that the past returns will be the same for the future. The emphasis has to be on guarantee, see next point:

Winners keep winning

Tom Gardner

When looking at past returns one could assume that a stock that is at the bottom of it’s 52 week low will have the most to gain and a stock at the top of it’s 52 week chart no more room to grow.
But that’s a very dangerous mistake (as looking at any one metric is), but there mostly is a reason why a stock is at its 52 week low or high. So especially when investing in companies the 52 week highs should be taken as a positive indicator. As winners tend to win.

Pigs get slaughtered

Wall Street?

Don’t be greedy. For me always have the fair value in mind. Especially when thinking about my own business and contracts. If a deal is already very good, take it! Don’t sweat over whether it could have been even better. Just be mindful to adjust your expectations if this happens to often. 😉

The full quote is: “Bulls make money, bears make money, pigs get slaughtered”. So basically: You can make money when the market goes up (bulls), and when the market goes down (bears), but if you’re too greedy you will loose money.

Beware of little expenses; a small leak will sink a great ship

Benjamin Franklin

Best example for this is the morning coffee or similar small expenses that occur every day. 200 working days a year x 3 Euro per coffee = 600 Euros. That’s a good coffee machine with grinder, and you can get more than one per day (even on weekends)!

You can’t produce a baby in one month by getting nine women pregnant.

Warren Buffett

That’s such a classic quote. Some things take time. Be patient. That’s one of my learnings the last years.

It’s not your salary that makes you rich; it’s your spending habits.

Charles A. Jaffe

When you earn 150.000 EUR and you spend 150.000 EUR, you’re not getting rich. (Spending is basically everything that’s not an investment in assets that might appreciate with time!)

In the short run, the market is a voting machine but in the long run it is a weighing machine

Benjamin Graham

The stock market will on a daily basis be influenced by a lot of short term noise and news. So when a company announces something the corresponding stock (and similar ones) might go up or down sharply, but these daily changes will accumulate in the long term and will reflect how much the market thinks the stock is really worth in comparison to other companies.