Trading & Investing Quotes

Written By

Dan Buckley

Updated

Mar 2, 2024

Below are some well-known trading and investing quotes that encapsulate various aspects of market philosophy, risk management, and trading and investment strategy.

We also have some unique quotes in the section after, which have fun applications to trading and investing contexts.

Trading & Investing Quotes

“[Many] know the price of everything, but the value of nothing.” – Philip Fisher

This quote emphasizes the distinction between price and value.

It highlights the importance of understanding a company’s intrinsic value rather than just its current stock price.

A company’s value can also differ by individual depending on their preferences and requirements.

“In the short run, the market is a voting machine but in the long run, it is a weighing machine.” – Benjamin Graham

Graham’s quote underscores the idea that while market sentiment may drive stock prices in the short term, ultimately, a company’s fundamental value will be reflected in its stock price over the long term.

“Be fearful when others are greedy and greedy when others are fearful.” – Warren Buffett

Buffett’s advice suggests that the best opportunities to buy stocks are when others are selling out of fear, and the best times to sell are when others are buying aggressively out of greed.

“The goal of a successful trader is to make the best trades. Money is secondary.” – Alexander Elder

This quote highlights that focusing on developing and executing a sound trading strategy is more important than the money that might come from trading.

It can also secondarily suggest that prioritizing what you enjoy is most important, as whatever you earn is likely to be a byproduct of that.

“Do not be embarrassed by your failures, learn from them and start again.” – Richard Branson

Although not specifically about trading, Branson’s advice is pertinent, where setbacks and losses are part of the learning process that can lead to greater success.

Markets are full of variance and mistakes are common. Nothing goes in a straight line.

“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.” – George Soros

Soros points out the importance of risk and money management in trading, and that winning percentage isn’t the most important factor.

Making more on winning trades than you lose on losing trades is key to successful trading and investing.

To use a baseball analogy, slugging percentage is more important than batting average.

Think more in terms of expected value.

For example, if you had a hypothetical strategy where you had a 1% chance of being right and a $1,000 reward for being right, and a 99% chance of being wrong a $1 penalty for being wrong, your expected value is +$9.01 for every iteration.

If assessed accurately, this will work, as long as you can cover the losses or dry spells in the interim.

“The four most dangerous words in investing are: ‘this time it’s different.'” – Sir John Templeton

Templeton’s quote warns against the belief that the fundamental principles of investing can be ignored based on current market conditions.

“Markets can remain irrational longer than you can remain solvent.” – John Maynard Keynes

This quote serves as a caution to traders and investors against taking positions that rely on the market quickly correcting an irrational pricing – i.e., such as notional long-term fundamental or equilibrium value – as markets can stay irrational for unpredictable periods.

Unique Trading & Investing Quotes

These quotes, while not originally about trading and investing, offer valuable insights into the mindset and strategies required for success in these fields.

Let’s explore what each quote means when applied to the context of trading and investing:

“I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.” – Jimmy Dean

This quote highlights the importance of adaptability in trading and investing.

Economies and markets are constantly changing, and being rigid in your approach can lead to very suboptimal results.

Successful traders and investors adjust their strategies to align with market dynamics to achieve their financial goals.

“The only true wisdom is in knowing you know nothing.” – Socrates

In the context of trading and investing, this quote emphasizes the value of humility and continuous learning.

Markets are complex with very high levels of dimensionality (many, many input variables affecting the output), and overconfidence in one’s knowledge can lead to risky decisions.

Acknowledging the limits of your understanding encourages a cautious approach and openness to new information and strategies.

“In flying, I have learned that carelessness and overconfidence are usually far more dangerous than deliberately accepted risks.” – Wilbur Wright

This quote can be related to risk management in trading and investing.

Carelessness and overconfidence can lead to neglecting risk management principles and significant losses.

On the other hand, successful traders and investors carefully assess and accept risks, and implement strategies to manage and mitigate them effectively.

Risky things – like flying an airplane or trading markets – aren’t necessarily risky as long as the risks are understood and controlled for.

“There are no beautiful surfaces without a terrible depth.”

Applied to trading and investing, this quote suggests that opportunities that appear attractive on the surface may involve hidden risks or complexities.

It emphasizes the importance of thorough research and analysis to understand the underlying factors that may impact an investment’s, trade’s, or position’s performance.

“All things are subject to interpretation. Whichever interpretation prevails at a given time is a function of power and not truth.”

In the financial markets, this quote underscores the subjective nature of market analysis and the influence of market sentiment.

Different traders/investors (or algorithms) may interpret the same information differently.

Market movements often reflect prevailing sentiments or the actions of big/powerful market participants rather than objective truths.

The price of anything is the money and credit spent on it divided by the quantity. It doesn’t have to reflect fundamental value, as that’s a much longer-term consideration.

“The surest way to corrupt a youth is to instruct him to hold in higher esteem those who think alike than those who think differently.”

This quote highlights the importance of diversity of thought in trading and investing.

Echo chambers can lead to narrow thinking, missed opportunities, and increased risk.

Valuing and considering different perspectives and strategies can enhance decision-making and lead to better trading/investment outcomes.

Markets are inherently a mix of various perspectives, so it’s a good idea to understand who are the buyers and sellers, how influential they are, and what they’re motivated to do.

“The individual has always had to struggle to keep from being overwhelmed by the tribe.”

This quote reflects the challenge of independent thinking in the face of market consensus or herd behavior.

Successful traders and investors often have to go against the crowd, and make decisions based on their analysis, information, and convictions rather than simply following popular trends.

Going against the crowd is necessarily to generate alpha.

“In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule.”

Applied to trading and investing, this quote warns against the irrationality that can prevail in markets, especially during bubbles or panics and downturns.

It underscores the need for rational, disciplined trading/investment approaches that resist getting caught up in the euphoria or despair of the masses.

“It is hard enough to remember my opinions, without also remembering my reasons for them!”

This quote humorously points to the importance of having clear rationales for trading/investment decisions.

Keeping track of the reasons for your trades or investments helps in evaluating their outcomes and learning from your experiences.

This can contribute to growth and improvement in your trading or investing strategy.