The Great Minds of Investing

I picked up this gem at the Berkshire meeting a few months ago. O’Brien worked on this book for five years. The quotes below are a few of my favorites. But the portraits make it the single best investment “coffee table book” ever produced. The image of Buffett on the rooftop of his office, for example, now resides in the National Portrait Gallery of the Smithsonian.

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[drizzle]Irving Kahn: “Considering the downside is the single most important thing an investor must do. This task must be dealt with before any consideration can be made for gains. The problem is that people nowadays think they're pretty smart because they can do something quite rapidly. You can make the horse gallop. But are you on the right path? Can you see where you're going?”

Bruce Greenwald: “Whenever you buy a stock, thinking it's going to do well, somebody else is selling it, thinking it's going to do badly, and one of you is always wrong. The key to successful investing is to understand why you are the one who is going to be on the right side of the trade.”

Paul Tudor Jones: “I know that to be successful, I have to be frightened. My biggest hits have always come after I have had a great period and I started to think that I knew something.”

Tom Russo: “Wall Street is flooded with hunters – people who try to go out and find the big game. They fell it and bring it back, and there's a huge feast and everything is fabulous, and then they look for the next big game. I plant seeds, and then I spend all of my time cultivating them. It's an extremely dull, very patient business.”

Pat Dorsey: “I think the single best thing any investor can do is to not have a TV and a Bloomberg in their office.”

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Warren Buffett: “Life is simple and uncomplicated here and that enables me to work better. I don't work to collect money. I work because I love what I'm doing.”

David Winters: “We're not trying to play the index game or the momentum game. Value investing is like religion: either you believe or you don't believe. We believe.”

Howard Marks: “The screwiest thing you can do is to think you're a master of the universe. We're all just little cogs, and the universe will go on without us. We have to fit into it and adapt to it. Change is inevitable. The only constant is impermanence. We have to accommodate to the fact that the wheel turns and the environment changes. It's very helpful to view the world as behaving cyclically and oscillating rather than going in a straight line. Everything is cyclical.”

Donald Yacktman: “The problem is convincing people to hang in there over long periods. This approach makes sense, but it only makes sense in the long term.”

Vincent Strauss: “Humility is essential in this business. If you don't listen to others, it's a danger for you, a danger for your clients, and a danger for the portfolio. If you think you know, you get killed. It's the end of the game because it means you stopped learning.”

Mario Gabelli: “We're information hounds. I have to be prepared for the unexpected and always afraid of missing something, paranoid about what I don't hear. The risk of failure is an important driver.”

Jean-Marie Eveillard: “You have to be humble because the future is uncertain. Most people refuse to accept that.”

Bill Ackman: “Having a reputation for doing what you say you're going to do is critical. Once you lose that, you have nothing.”

Mason Hawkins: “We have to justify our actions when we look in the mirror every morning while shaving. If our colleagues are happy with that fella they see in the mirror, all's right in the world . . . We ought to be invested in the same things as our clients, on the same terms, and reap the same rewards and bear the same risk and cost.

Francis Chou: “If something is expensive, you can always buy a substitute that's cheaper. There are more than 20,000 companies. So, if something is expensive, you just go to the next one. You're always looking for alternatives . . . If you want to participate in the market all the time, then it's a mug's game and you're going to lose. You only want to be a participant when the odds are in your favor.”

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Charlie Munger: “We don't have any new tricks. We just know the old tricks better.”

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