25 Pages of the Best Value Investing Quotes (PAGE WILL LOAD SLOWLY)

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Munger: You say there is some vaguely established view in economics as to what is an optimal dividend policy or an optimal investment? Professor William Bratton of the Rutgers-Newark School of Law: I think we all know what an optimal investment is. Munger: No, I do not. At least not as these people use the term. Bratton: I don’t know it when I see it but in theory, if I knew it when I saw it this conference would be about me and not about Warren Buffett. Munger: What is the break point where a business becomes sub-optimal or when an investment becomes sub-optimal? Bratton: When the return on the investment is lower than the cost of capital. Munger: And what is the cost of capital? Bratton: Well, that’s a nice one and I would… Munger: Well, it’s only fair, if you’re going to use the cost of capital, to say what it is. Bratton: I would be interested in knowing, we’re talking theoretically. Munger: No, I want to know what the cost of capital is in the model. Bratton: In the model? It will just be stated. Munger: Where? Out of the forehead of Job or something? Bratton: That is correct. Munger: Well, some of us don’t find this too satisfactory. Bratton: I said, you’d be a fool to use it as a template for real world investment decision making. We’re only trying to use a particular perspective on human behavior to try to explain things. Munger: But if you explain things in terms of unexplainable sub-concepts, what kind of an explanation is that?Bratton: It’s a social science explanation. You take for what it’s worth. Munger: Do you consider it understandable for some people to regard this as gibberish? Bratton: Perfectly understandable, although I do my best to teach it. Munger: Why? Why do you do this? Bratton: It’s in my job description. Munger: Because other people are teaching it, is what you’re telling me.



Miscellaneous (i.e., not all investing related)


“It’s frightening to think that you might not know something, but more frightening to think that…the world is run by people who have faith that they know exactly what’s going on.” – Amos Tversky


“Genius is nothing but a greater aptitude for patience.” – Georges-Louis Buffon


“Patience is the greatest of all virtues.” — Marcus Porcius Cato


“Continuous effort — not strength or intelligence — is the key to unlocking our potential.” – Winston Churchill


“Decide what you want, decide what you are willing to exchange for it. Establish your priorities and go to work.” – H. L. Hunt


“Nullius in verba.” (“Take nobody’s word for it.”) – Motto of the Royal Society


“God is in the details.” – Mies van der Rohe


“Details create success.” – John Wooden



“Value is a relative concept: the value of each action is determined by comparing it with other possible actions.” – Garrett Hardin[125]


“Every measured thing is part of a web of variables more richly interconnected than we know.” – Garrett Hardin[126]


“Every plausible policy must be followed by the question ‘And then what?’” – Garrett Hardin[127]


“The greatest folly is to accept expert statements uncritically. At the very least, we should always seek another opinion.” – Garrett Hardin[128]


“The three filters [against folly] operate through these particular questions:

Literacy: What are the words?

            Numeracy: What are the numbers?

            Ecolacy: And then what?”                                          — Garrett Hardin[129]


“Numeracy: 1. The art of putting numbers to things, that is, assigning amounts to variables in order that practical decisions may be reach. 2. That aspect of education (beyond mere literacy) which takes account of quantitative aspects of reality.” – Garrett Hardin[130]


“(Technology reliability) x (Human reliability) = (System reliability)” – Garrett Hardin[131]


“The only thing we can really count on in this uncertain world is human unreliability itself.” – Garrett Hardin[132]


“Unless you have read and absorbed the best that can be read and absorbed, you will not think clearly or well.” – Harold Bloom


Disasters teach more than successes. – Anonymous


“We are what we repeatedly do.” – Aristotle


“When we try to pick out anything by itself, we find it hitched to everything else in the universe.” — John Muir


“The most difficult subjects can be explained to the most slow-witted man if he has not formed an idea of them already; but the simplest thing cannot be made clear to the most intelligent man if he is firmly persuaded that he knows already, without a shadow of a doubt, what is laid before him.” – Leo Tolstoy


“Enemies parrot yes while friends say no.” – Russian proverb


“Nothing is easier than self-deceit. For what each man wishes, that he also believes to be true.” – Demosthenes


“No money is better spent than what is laid out for domestic satisfaction.”  — Samuel Johnson


“To be happy at home is the ultimate result of all ambition.” – epigram of Samuel Johnson


“All of humanity’s problems stem from man’s inability to sit quietly in a room alone.” – Blaise Pascal


“Not everything that can be counted counts, and not everything that counts can be counted.” – Albert Einstein


“For an idea which, at first, does not seem absurd, there is no hope.” – Albert Einstein


“Everything should be made as simple as possible, but not simpler.” — Albert Einstein


“Chance favors only the prepared mind.” – Louis Pasteur


“He who labors diligently need never despair, for all things are accomplished by diligence and labor.” – Menander


Wisdom is “the art of knowing what to overlook.” – William James


“Beware of little expenses; a small leak will sink a great ship.” – Benjamin Franklin


“If thou wilt make a man happy, add not unto his riches but take away from his desires.” – Epicurus


“Trust, then verify.” – Ronald Reagan


“We never really know and the very fact that there are such words in the language as disappointment, regret, etc., is testimony to the pervasiveness and persistence of this feature of the human condition.” – Thomas Sowell


“[There are] three different kinds of problems in the world: the simple, the complicated, and the complex. Simple problems…are ones like baking a cake from a mix. There is a recipe. Sometimes there are a few basic techniques to learn. But once these are mastered, following the recipe brings a high likelihood of success. Complicated problems are ones like sending a rocket to the moon. They can sometimes be broken down into a series of simple problems. But there is no straightforward recipe. Success frequently requires multiple people, often multiple teams, and specialized expertise. Unanticipated difficulties are frequent. Timing and coordination become serious concerns. Complex problems are ones like raising a child. Once you learn how to send a rocket to the moon, you can repeat the process with other rockets and perfect it. One rocket is like another rocket. But no so with raising a child…Every child is unique. Although raising one child may provide experience, it does not guarantee success with the next child. Expertise is valuable but certainly not sufficient. Indeed, the child next child may require an entirely different approach from the previous one. And this brings up another feature of complex problems: their outcomes remain highly uncertain. Yet we all know that it is possible to raise a child. It’s complex, that’s all.” – Atul Gawande[133]

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