Warren Buffett quote

“Some great big strong American companies look very cheap compared to investment alternatives. I mean, in the end, you know, you're sitting with money in your pocket. Do you leave it in your pocket, you get zero on, do you put it in a money market fund, you still get zero on it, do you buy 10-year Treasuries and get 2 percent, or do you buy American businesses that are earning very good money, that have high returns on equity, have high returns on incremental capital, are buying in their stock at a rapid rate so that your ownership in the business increases significantly? I love all those things.

“The world's always uncertain. The world was uncertain on December 6th, 1941, we just didn't know it. The world was uncertain on October 18th, 1987, you know, we just didn't know it. The world was uncertain on September 10th, 2001, we just didn't know it. The world—there's always uncertainty. Now the question is, what do you do with your money? And if you—the one thing is if you leave it in your pocket, it'll become worth less—not worthless—worth less over time. That's certain—that's almost certain…If you own a good business locally in Omaha and somebody says Italy's got problems tomorrow, do you sell your—do you sell your business? No. But for some reason, people think if they own wonderful businesses indirectly through stocks, they've got to make a decision every five minutes. So I do not think if Ben Bernanke comes up and whispers to me that he's going to do X, Y or Z tomorrow, I'm not going to change my view about what businesses I want to own.”
-- Warren Buffett on CNBC 

Master your emotions

"Individuals who cannot master their emotions are ill-suited to profit from the investment process."
-- Benjamin Graham

Warren Buffett Quote

"The stock market remains an exceptionally efficient mechanism for the transfer of wealth from the impatient to the patient."
-- Warren Buffett

Ride the market - up and down

"The only way to ride the market up, is to ride it down from time-to-time."
--Dave Yeske

Americans always do the right thing?

"Americans will always do the right thing after they've exhausted all the alternatives."
-- Winston Churchill

Ground glass?

He who lives by the crystal ball soon learns to eat ground glass."
–Edgar R. Fiedler

Peter Lynch

“Far more money has been lost in anticipation of market declines than has been lost in the actual declines.”
-Peter Lynch

Warren Buffett's Observation

An observation by Warren Buffett:

It only takes two things to succeed an an investor: first, having a reasonable plan, and second, sticking to it--and it's the sticking-to-it part that investors struggle with.

Your Federal Tax Receipt. Find out what your taxes paid for.

This is cool (or depressing). Enter your total Federal tax payments INCLUDING social security payments by you and your employer. The display shows how your share is spent. Social Security payments are the largest at 20.4%

http://www.thirdway.org/taxreceipt

Quotes about Human Nature

"Human nature being what it is, there is a natural cycle to our emotions about the markets. We tend to go from terror during a major decline to disbelief through much of the subsequent advance—and then to a sense of ‘I’ve missed it, and I have to run to catch up—gotta jump on what’s hot!’ as the bull market continues. Again, this cycle of emotions is very human—but it’s a formula for very bad long-term investment outcomes.

First of all, remember that you can act your way to investment success, but you can’t react your way. If you react to falling markets by fleeing them, and then belatedly lunge at whatever’s fashionable in an attempt to catch up, you’ve actually found two ways to get hurt. We’ve talked a lot over the last couple of years about the mistake of panic; now may be the time to talk about the mistake of chasing immediate past performance.

Second only to panicking out of the markets, there may be no more sure way of getting substandard investment outcomes than by overinvesting in whatever has been red hot in the last block of time—and then, when that sector inevitably goes cold, chasing some newer vogue. Warren Buffett famously said that the investor of today does not profit from yesterday’s growth, and performance-chasing is the most painful way of demonstrating that truth to yourself. You are almost always trying to buy a track record that someone else already got, and that turns out not to be replicable.

I continue to believe that the most reliable approach is to diversify across several equity sectors and styles—large company and small company, growth and value, domestic and international—in roughly equal amounts, and then rebalance your portfolio back to its original allocations once a year around the same time. To me, this is the tortoise approach to long-term equity investing. And although we will surely see a red-hot hare go whizzing past us from time to time, as we continue to plod along we’ll sooner than later find that hare gasping in exhaustion at the side of the road—and we’ll pass him.

Broad diversification with annual rebalancing remains the best equity strategy I know to pursue your long-term financial goals. It is the antidote to panic in falling markets. But more to the point today, it is the antidote to the siren song of the one red-hot sector that is going to make up for all lost time."

--Nick Murray