Paul Samuelson Quotes

What you really want to do in investments is figure out what's important and knowable. If it's unimportant or unknowable you forget about it.

You'd rather own gold; never own the miner.

Investing is about making probabilistic decisions with limited information about an unknowable future. The variables are well known, as are the possible outcomes.

I'm not sure at all that I'm any good at this mentoring/investing business - that's why I'm using my own money, and that's why it's not a career.

Just because a company's future is highly uncertain doesn't mean an investment in it is risky. In fact, some of the best potential investments are highly uncertain but have little risk of permanent capital loss.

The hardest thing to judge is what level of risk is safe.

Before you invest, you must ensure that you have realistically assessed your probability of being right and how you will react to the consequences of being wrong.

When investing, pessimism is your friend, euphoria the enemy.

An important key to investing is to remember that stocks are not lottery tickets.

Risk is good. Not properly managing your risk is a dangerous leap.

You're looking for a mispriced gamble. That's what investing is. And you have to know enough to know whether the gamble is mispriced. That's value investing.

I’ve learned many things from him [George Soros], but perhaps the most significant is that 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.

If you roll dice, you know that the odds are one in six that the dice will come up on a particular side. So you can calculate the risk. But, in the stock market, such computations are bull - you don't even know how many sides the dice have!

An argument is made that there are just too many question marks about the near future; wouldn't it be better to wait until things clear up a bit? You know the prose: "Maintain buying reserves until current uncertainties are resolved," etc. Before reaching for that crutch, face up to two unpleasant facts: The future is never clear and you pay a very high price for a cheery consensus. Uncertainty actually is the friend of the buyer of long-term values.

There is general agreement among researchers that nearly all stock pickers, whether they know it or not-and few of them do-are playing a game of chance.

Wall Street sometimes gets confused between risk and uncertainty, and you can profit handsomely from that confusion. The low-risk, high-uncertainty [situation] gives us our most sought after coin-toss odds. Heads, I win; tails, I don't lose much.

It would be wonderful if we could avoid the setbacks with timely exits, but nobody has figured out how to predict them.

Diversification is protection against ignorance. It makes little sense if you know what you are doing.

You have to keep your priorities straight if you plan to do well in stocks.

There is a close logical connection between the concept of a safety margin and the principle of diversification.

Instead of hoping he must fear and instead of fearing he must hope. He must fear that his loss may develop into a much bigger loss, and hope that his profit may become a big profit.

If your broker or investment advisor is not familiar with the concept of standard deviation of returns, get a new one.

Take the probability of loss times the amount of possible loss from the probability of gain times the amount of possible gain. That is what we're trying to do. It's imperfect, but that's what it's all about.

When you build a bridge, you insist that it can carry 30,000 pounds, but you only drive 10,000-pound trucks across it. And that same principle works in investing.