Market Wisdom

"In the argument over the what and the when, I believe the what will invariably win over the when."  Taking the Long View, Jean Riboud, CEO, Slumberger


Feeling the pure joy of work and success - jumping out of bed in the morning charged up to accomplish something in the day ahead - is necessary for an entrepreneur.
- T. Boone Pickens


I hate to fail, but when it's time to take a bath, I get in the tub...
- T. Boone Pickens

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Gerald Loeb:

The person who studies a problem from every angle and defines the risks, aims and possibilities correctly before he starts is more than halfway to his goal.

Diversification is necessary for beginners but the real great fortunes were made by concentration.

In the end, we are judged by our contribution.



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The virtue of prosperity is temperance; the virtue of adversity is fortitude. -Francis
Bacon, 1625

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Peter Drucker (October 23, 1987)

Wall Street traders are like Balkan peasants stealing each others sheep...

The last two years were just too disgusting a spectacle, and you know it won't last long...

When you reach the point where the traders make more money than the investors, you know its not going to last.

He stresses two points in particular: that any speculative bubble must burst, and that the inexperience of many youthful brokers has been an important factor in the recently unstable markets.

The average duration of a soap bubble is known - it's about 26 seconds then the surface tension becomes too great and it burstd.  For speculative crazes, it's about 18 months.

The bubble had to burst partly because there is no foundation there, partly because there is no thinking there, and partly because their horizon has become the next 10 minutes.  And the anybody whoe cries "Fire!" sets off a panic.  You don't even have to cry fire.  If somebody leaves the house, they - the traders - suspect there is a fire.  

When you look at who dominates the scene, they are mostly people who weren't there five years ago - and who have absolutely no judgement... they keep endless hours, but that is not the same thing as doing any thinking or doing any work.

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"When beggars and shoeshine boys, barbers and beauticians can tell you how to get rich, it is time to remind yourself that there is no moredangerous illusion than the belief that you can get something for nothing."
-Bernard Baruch, mid-1920's



Stock profits begin with the perception of a few and end with the conviction of many.
- A. Zeikel, Merrill Lynch Asset Management



Conservative investors are not risk takers, they are risk averters.  They study a deal from all angles and are not afraid to walk away from a deal that is not shaping up right.    They want to understand the risks and to reduce them where possible.  They bide their time and try to massage the 'deck' to the point hwere the odds are 9 out 10 in their favor.  Otherwise they look elsewhere to invest. Nobody in their right mind wants to be a risk taker...



Rules for a Bear Market: When in doubt, let the market shake out and sell on rallies.  Forget any notions that the market is cheap0, because share prices when share prices fall out of the stratosphere, they may still be expensive from an intrinsic value point of view.

"If you have trouble imagining a 20% loss in the stock market, you shouldn't be in stocks." John (Jack) Bogle