“The gold-bugs have been around forever. The market still has gas. Who understands gold, anyway? And how can you worry about something you can’t understand?”
“What is it the good managers have? It’s a kind of locked-in concentration, an intuition, a feel, nothing that can be schooled. The first thing you have to know is yourself. A man who knows himself can step outside himself and watch his own reactions like an observer ...”
“The market is a crowd ... a composite personality. In fact, a crowd of men acts like a single woman. The mind of a crowd is like a woman’s mind. Then, if you have observed her for a long time, you begin to see little tricks like little nervous movements of the hands when she is being false.”
“If the profit numbers on income statements are treated with such reverence, it was obviously only a question of time before some smart fellows would start building companies not around the logical progression of a business but around what would beef up the numbers. ”
“A man is really at his best, his most fulfilled, when he’s on the way to becoming what he’s going to become ... With good men, you can see the learning juices churning around every mistake .”
“Logic, to an outsider, would say that you have a company selling at 10 and you go and do a lot of research on it and figure out the sales and the profits and you figure if they can earn one dollar it will sell for 20. So you buy it and wait, and the story gets that they earn the one dollar … but the market does not follow logic, it follows some mysterious tides of mass psychology . Thus earnings projections get marked up and down as the prices go up and down, just because Wall Streeters hate the insecurity of anarchy. If the stock is going down, the earnings must be falling apart. If it is going up, the earnings must be better than we thought. Somebody must know something we don’t know.”
“Quarterly reports came out saying, the outlook is favourable ... But from 1930 to 1933, a real blight of the spirit took place. The prudent men, believing in the long-term growth of the American economy, saw their holdings in the bluest of American blue chips drop 80%-90%. It was the psychology of panic ... the fall in the market was very largely due to the psychology by which it went down because it went down .”
“We all know what a millionaire is, and when the adding machine says $1m, there is a beaming figure facing it. But when the machine says 00.00 there should be no one at all because that identity has been extinguished, and the trouble is that sometimes when the adding machine tape says 00.00 there is still a man there to read it.”
