It’s often a mistake to boil an investment strategy down to a few words. Investing is a complex business, and there 
are all sorts of risks you need to manage and nuances you need to understand. However, sometimes a quote is just too good to ignore – and may serve as a constant reminder of what to do and what not to do. Here are 10 of the best.
- Buy not on optimism, but on arithmetic.
It’s all too easy to get swept away in hype or unrealistic expectations. However, if you want to succeed, shelve the emotions and focus on analyzing your opportunities.
- Investing is the intersection of economics and psychology.
Analyzing opportunities doesn’t just mean looking at long-term value. Psychology moves markets as well, which is why technical analysis is such a valuable tool for short to medium-term investing.
- Know what you own, and know why you own it.
This sounds like it could be Warren Buffett, but it isn’t. It’s Peter Lynch, and the point is that every investment should be a fact-based decision, with well-defined objectives. When it’s clear those objectives won’t be served, it’s time to invest in something different.
- Price is what you pay. Value is what you get.
This one is from Buffett. It should be the mantra of every value investor. Just because you pay a lot doesn’t mean you’re getting value – in fact, the best value investors find the hidden gems before everyone else does.
- Behind every stock is a company. Find out what it’s doing.
Peter Lynch again. The only way to pick stocks for the long term is to look at the fundamentals of the company you’re investing in.
- If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.
This from George Soros, the man who broke the Bank of England. Investing isn’t a roller coaster – or it shouldn’t be. Make investments that you understand well, and you’ may become boringly profitable.
- Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world.
This is from Charlie Munger, Warren Buffett’s right-hand man at Berkshire Hathaway. Pick your battles and focus on what’s important – if you spread yourself too thin, you’ll not get anything done.
- Value investing is at its core the marriage of a contrarian streak and a calculator.
To find real value opportunities, don’t follow the herd – but make sure everything adds up.
- Risk comes from not knowing what you’re doing.
Great investors understand what they’re getting into, including the risks they are taking on. True risk is not knowing how big your risk is.
- Cash combined with courage in a time of crisis is priceless.
When all about you are losing their heads, it’s time to start looking for bargains. If you invest fearlessly in undervalued stocks that you know have long-term potential, you’ may turn your lemons into lemonade.
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