Words matter. These are the best Barry Ritholtz Quotes, and they’re great for sharing with your friends.
Forecasting is simply not a strength of the species; we are much better with tools and narrative storytelling.
Anyone can make an article longer; the skill is keeping it tight and lean.
When markets are rallying, cash in the portfolio is a drag on performance, returning about zero.
Hedge funds are not especially liquid. Many are ‘gated’ – meaning there are only small windows when you can withdraw your money. They typically have a high minimum investment and often require investors keep their money in the fund for at least one year.
Shopmas now begins on Thanksgiving Day. Apparently, escaping the families you cannot stand to spend another minute with on Thanksgiving Day to go buy them gifts is how some Americans show their affection for one another. Weird.
How are the cabs in your city? In Manhattan, where I work, they are rather awful.
If you have read me for any length of time, you know I am less than enthralled with much of what passes for financial news.
Commissions add up, taxes are a big drag, margin ain’t cheap. A good accountant costs money as well. The math on this one is obvious, yet investors often fail to recognize it: Keep your costs low and your turnover lower, and you will win in the end.
Many hedge fund managers have become billionaires; perhaps this – plus their reputations as the smartest guys in the room – is why they have captured the investing public’s imagination.
The way we finance homes in this country is slow, filled with middlemen, who run a nonstandardized evaluation process. This makes financing a home cumbersome and difficult.
Good investors must learn to contextualize the daily background noise.
Getting more and more of our news from the social network is having significant repercussions for markets – and your money.
We love a tale of heroes and villains and conflicts requiring a neat resolution.
When it comes to investing, there is no such thing as a one-size-fits-all portfolio.
Investors tend to discover ‘hot’ mutual fund managers just after a successful run and just before the inescapable force of mean reversion is about to kick in.
Most of the time, economic data is fairly benign. I don’t wish to imply it is meaningless, but it is not a driver of stock markets. Indeed, the correlation between economic noise and how equity markets perform has been wildly overemphasized.
Google’s founders have had a good eye for imagining what technologies will be significant in the near future. No one asked Google to develop self-driving cars, but it helped them with street views for Google Maps.
No one knows what the top-performing asset class will be next year. Lacking this prescience, your next-best solution is to own all of the classes and rebalance regularly.
Narrative drives most of economics. Everything seems to be part of a story, and how that story is told often leads to critical error.
In New York, the former lack of real competition allowed taxis to extract excessive charges, regardless of the poor service.
Whenever you try to pick market tops and bottoms, you are making a prediction. Guessing what stock is going to outperform the market is forecasting, as is selling a stock for no apparent reason. Indeed, nearly all capital decisions made by most people are unconscious predictions.
One thing I detest most about the financial press is the lack of accountability. All sorts of nonsense is said without penalty.
History is replete with examples of tech firms that were marginalized by new companies and technologies.
You want less of the annoying nonsense that interferes with your portfolios and more of the significant data that allow you to become a less distracted, more purposeful investor.
Any Wall Street advertising that does not go into the boring details of methodology is most likely to be pushing past performance.
Even when you are right, there are costs and taxes associated with being tactical. When you are wrong, there are opportunity costs.
The ability to select stocks, manage them over time and know when to sell them is incredibly difficult, even for professional fund managers.
To know whether stocks are cheap or pricey, we typically look at price-to-earnings ratio. Valuation is a tougher question than many folks realize.
What you pay for an investment is the single biggest determinant for how successful that investment will be. When equity prices are high, your returns will be lower. When they are cheap, your returns will be higher.
People who work in specialized fields seem to have their own language. Practitioners develop a shorthand to communicate among themselves. The jargon can almost sound like a foreign language.
Asset managers have different approaches, and I don’t wish to suggest there is only one way to run money. There are many ways one can attempt to reduce risk, improve performance, lower drawdowns and reduce volatility.
Footage of people camped out at Best Buy or elsewhere is not remotely a celebration. Rather, it’s a reminder of just how economically distressed a large percentage of our populace is.
Owning a variety of asset classes means that some part of your portfolio will be doing well when the cyclical turmoil arises. A broadly diversified portfolio includes large capitalization stocks, small cap, emerging markets, fixed income, real estate and commodities.
Investing is about making probabilistic decisions with limited information about an unknowable future. The variables are well known, as are the possible outcomes.
Any time you speak to people about their posture, you learn about their most recent investment activity. When someone just bought stocks, they tend to be bullish; someone who just sold is bearish.
I have been a member of the Microsoft-bashing society for quite some time.
Despite all the media coverage, glitz and glam of hedge funds, they have not done well for their investors. They have high – some say excessively high – fees; their short- and long-term performance has been poor.
Amongst the financial Twitterati, the term ‘muppets’ has come to describe any client used and abused by some financial predator. I’ve adopted the term to describe portfolios that have been assembled for purposes other than serving the clients’ best interests.
I credit Google for having the foresight to identify threats to its main business of selling advertising against search results. The potential loss of market share in the mobile space led them to the Android acquisition.
History shows us that people are terrible about guessing what is going to happen – next week, next month, and especially next year.
If you think too-big-to-fail banks are not worthy of investment because of their impossible-to-read balance sheets, well then, don’t buy them.
When you buy anything with lots of leverage, it does not require a whole lot to go wrong to lose it all.
Have a well-thought financial plan that is not dependent upon correctly guessing what will happen in the future.
The data strongly suggest that very good years in the U.S. stock market are followed by more good years.
Whenever you hear a discussion about the short-term swings in any given stock’s price, your immediate thought should be whether it matters to why you are investing.
Secular cycles are the long periods – as long as decades – that come to define each market era. These cycles alternate between long-term bull and bear markets.
A well-designed 401(k) plan is an enormous competitive edge when recruiting and retaining employees.
If I am going to trash others for their dumb predictions, I must at least hold myself to the same sort of accountability.
Rather than engage in the sort of selective retention that so many investors tend to do and pretend mistakes never happened, I prefer to ‘own’ them. This allows me to learn from them and, with any luck, avoid making the same errors again.
With Twitter, you can build your own virtual trading floor and research department, populated by the smartest people on earth. Almost any subject or sector has you can think of, you can find a few people with an expertise in that area.
The beauty of diversification is it’s about as close as you can get to a free lunch in investing.
Once you research an idea, you begin to develop a perspective. Writing about anything in public, often in real time, has helped fashion my views.
Salesmen always need something to sell.
Whenever I see a forecast written out to two decimal places, I cannot help but wonder if there is a misunderstanding of the limitations of the data, and an illusion of precision.
You, your employer and your plan’s investment managers fail to follow even the most basic rules of investing. You overtrade, chase performance, do not think long term. All of you – All Of You – have done a horrible job managing your retirement plans.
