Benjamin Graham

Quotes from famous value investors can sometimes teach me far more than reading an 80 page sell-side report ever would. Even a line or two with a bit of wit can teach a lesson which lasts for a lifetime. We try to post quotes on our Facebook page pretty frequently.  Below are some of my favorite quotes from some of my favorite value investors (I hope to do this on a regular basis).

Prem Watsa

Why do Roman bridges historically last for a long, long time? Why did they last for a long time? The key reason was that the people who designed the bridges had to stand underneath it before the traffic went on. So they made sure there was a massive margin of safety. And bridges lasted for years and years and years.

Irving Khan

Lemmings always lose

Howard Marks

Scepticism and pessimism aren’t synonymous. Scepticism calls for pessimism when optimism is excessive. But it also calls for optimism when pessimism is excessive.

Charlie Munger (this is my favorite quote)

In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time – none, zero.

Sir John Templeton 

An investor who has all the answers doesn’t even understand the questions.

John Neff

Successful stocks don’t tell you when to sell. When you feel like bragging, it’s probably time to sell.

Seth Klarman

The key watchword for the first half of the year [2012] was patience. We patiently sifted through scores of interesting investment ideas to find only a few really good ones. We patiently held cash while waiting for prices to hit our buy levels before accumulating. We stayed abreast of the U.S. markets where most of our investments reside, while patiently searching European markets for the occasional morsel, despite the frustrating reality that most sellers continue to cling tightly to their troubled assets–at least for now. All the while, we built up our knowledge of European markets, country by country and asset class by asset class, while expanding our base of relationships and developing price targets for many businesses and assets that we would love to own at the right valuation, awaiting a reckoning that we deem likely to come but at a date uncertain.

Peter Lynch

All else being equal, invest in the company with the fewest colour photographs in the annual report.

Bruce Berkowitz

Cash is like a financial valium, that you can keep your cool during very difficult times.

It’s like the longer we can hold an investment, the better we feel that all the time and effort we put into studying a company- it’s kind of when we sell a position, I feel as if it’s divorce.
We start with this basis: The only thing you can spend is cash. We want companies that generate significant cash in most times. That is how we start. We don’t care much about what they make, but we have to understand it. The balance sheet has to be strong; we want to make sure there are no tricks in the accounting. Then we try and kill the company. We think of all the ways the company can die, whether it’s stupid management or overleveraged balance sheets. If we can’t figure out a way to kill the company, and its generating good cash even in difficult times, then you have the beginning of a good investment.

And least but not least (if you like some humor even better)

I must wonder how in this day and age, the company’s board of directors has not held you (Robinson) and Paul Maier responsible for your respective failures and shown you both the door long ago – accompanied by a well worn boot planted in the backside.”

“It is time for you to step down from your role as CEO and director so that you can do what you do best: retreat to your waterfront mansion in the Hamptons, where you can play tennis and hobnob with your fellow socialites.”

“Whether we own shares for the short-term or long-term, it’s a red-herring issue that incompetent management uses to distract people from the real issues, … In this case, the issue is that Ligand is beset by Robinson’s and Maier’s incompetence and failure.”

“Brendan, it’s time for you to put your money where your mouth is. If you are sincere in your statement that a premium bid for the company is not worthy of discussion, then we must insist that you demonstrate your conviction by acquiring shares.”

Dan Loeb (who else)?