One dollar invested with me in 1967 would have been worth $481 on the day I closed the firm in 1995, versus $19 if it had been invested in a Standard & Poor’s index fund.
When your views are truly contrarian, they are inevitably uncomfortable. Courage and the ability to withstand pain are required.
A good trader has to have three things: a chronic inability to accept things at face value, to feel continuously unsettled, and to have humility.
One of the most important analytic tools when assessing an investment is an intellectually advantaged disparate view. This includes knowing more and perceiving the situation better than others do. It is also critical to have a keen understanding of what the market expectations for any investment truly are. Thus, the process by which a disparate perception, when correct, becomes consensus should lead to meaningful profit. Understanding market expectation is at least as important as, and often different from fundamental knowledge.
I hope he has the breadth to do it
I do an enormous amount of trading, not necessarily just for profit, but also because it opens up other opportunities. I get a chance to smell many things. Trading is a catalyst.
A little part of my life is built around ancient art.
Speculative joy, the joy derived from being right and being rewarded, may well be similar to the rush felt by a winning gambler.
The markets are always changing, and the successful trader needs to adapt to these changes.
Do not make small investments. If you are going to put money at risk, make sure the reward is high enough to justify the time and effort you put into the investment decision.
The hardest thing over the years has been having the courage to go against the dominant wisdom of the time to have a view that is at variance with the present consensus and bet that view. The hard part is that the investor must measure himself not by his own perceptions of his performance, but by the objective measure of the market. The market has its own reality. In an immediate emotional sense the market is always right so if you take a variant point of view you will always be bombarded for some time by conventional wisdom as expressed by the market.
You have to be intellectually honest with yourself and others. In my judgment, all great investors are seekers of truth.
If you see a wonderful archaic Greek marble object in a museum, it’s not only that it’s beautiful, but what comes to your mind is the fact that it’s 2,600 or so years old, and it was done by a human being at that time who you have such a limited ability to grasp – and yet you have this enormous ability to grasp.