OK, I'll bite. I love this kind of stuff. Below are quotations and rules copied from the slides for a six-hour investment class that I teach:
H. L. Mencken: “For every complex problem, there is a solution that is simple, neat and wrong.”
Warren Buffet: “The stock market is a device for transferring money from the impatient to the patient.”
William Bernstein on investing for retirement: "“Make no mistake about it: The object of this particular game is not to get rich – It’s to not get poor.”
E. J. Smith, Captain, RMS Titanic, prior to his voyage: “But in all my experience, I have never been in any accident … of any sort worth speaking about. I have seen but one vessel in distress in all my years at sea. I never saw a wreck and never have been wrecked nor was I ever in any predicament that threatened to end in disaster of any sort.”
Rule of Thumb: The more complicated an investment product is, the more likely it is that it was designed to make money for the seller, not to make money for you.
Ezra Solomon, professor of economics at Stanford University and a member of the Council of Economic Advisors during the Nixon administration: “The only function of economic forecasting is to make astrology look respectable.”
William Bernstein: “Do you think that by choosing a portfolio of only a few stocks that you hope will score big, you are maximizing your chances of becoming wealthy? Indeed you are, but you are also maximizing the chances of a retirement of cat food cuisine”
Morningstar Research: “The expense ratio is the most proven predictor of future fund returns.”
The Investment Industry’s 2-Part Myth:
1: There are people with investment skills that enable them to consistently beat the stock market’s average performance.
2. It is possible to identify such people in advance and it is possible for investors to hire them.
Why does the industry perpetuate the myth in the face of 50 years of statistical data and academic research that disproves it? Upton Sinclair explains: “It is difficult to get a man to understand something when his salary depends upon his not understanding it”
"When in doubt, don't."
