James B. Stewart Quotes

Here is a dirty little secret: Stock-picking is wildly overrated. Sure, it makes for great cocktail party chatter, and what is more fun than delving into a company's new products? But the truth is that individual stocks are riskier than broad indices.

I'm sometimes accused of being hostile to mutual funds. That's not fair, really. There is a place for them. Still, I am hostile to one thing, which is trying to use funds to time your way in and out of the market. That's a recipe for very bad results.

Many financial innovations such as the increased availability of low-cost mutual funds have improved opportunities for households to participate in asset markets and diversify their holdings.

A financial crisis is a great time for professional investors and a horrible time for average ones.

I think over any period of time, especially if you don't use leverage, it is difficult to continually beat the S&P 500.

Of course. I favor passive investing for most investors, because markets are amazingly successful devices for incorporating information into stock prices.

Mutual funds dare to be average. In fact, they dare to be lousy. They have long since ceased striving for anything resembling perfection when it comes to managing your money.

There can be few fields of human endeavor in which history counts for so little as in the world of finance.

Children should be taught in school that you should have all kinds of asset classes in your portfolio. They should be taught what those asset classes are, and their advantages and disadvantages.

If you trade in paper, the notion of many who trade gold - the Ayn Randers - if the financial world comes to an end, they're going to have the gold. If you're playing in ETFs, you're going to have a piece of paper.

The investing world is a little bit more multidimensional than poker.

I'd say the general outline of a sound investment approach is, first of all, you have to decide are you going to try to be an investor yourself? The answer for most people is probably they shouldn't try. You should put your money in index funds and not try to be a stock picker.

I had done some work on index funds in my senior thesis at Princeton in 1951.

I went into investments out of interest and thought I knew a little. The longer I've been involved, the less I realise I'd known.

The long-term focus of index funds is a much needed counterweight to the short-termism favored by so many market participants.

The world of derivatives is full of holes that very few people are really aware of. It's like hydrogen and oxygen sitting on the corner waiting for a little flame.

I don't think that hedge funds are bad per se. I think they're just one more financial tool. And in that sense, they're useful.

LTCM lost money when Russia defaulted on a certain class of bonds, and then they had other investments like on the spread between two different kinds of shares of Royal Dutch Shell Oil Company. Now that seems completely unrelated to Russian bonds. But they were related because other hedge funds saw similar discrepancies and they were all making similar bets.

Taking this view, it is possible to see financial markets as a laboratory for testing hypotheses, albeit not strictly scientific ones. The truth is, successful investing is a kind of alchemy.

Mutual funds are an overrated investment heavily promoted by Wall Street.

People who invest make money for themselves; people who speculate make money for their brokers. And that, in turn, is why Wall Street perennially downplays the durable virtues of investing and hypes the gaudy appeal of speculation.

Index investing outperforms active management year after year.

For us, whether the market is skewed from a bubble perspective or not really is mitigated by staying focused on what we do best.

The starting point of my career in money management in 1973-74 was the time of the only true bear market any living non-Japanese investor has seen in major markets. Equities, real estate, you name it, everyone got run over.

The financial markets generally are unpredictable. So that one has to have different scenarios... The idea that you can actually predict what's going to happen contradicts my way of looking at the market.