Barry Ritholtz Quotes

Approaches to determining stock values vary, but fundamentally, each company judging itself undervalued is saying that its future stream of earnings justifies a higher price than the stock market is willing to accord it.

I particularly remember the time I gave (the research director) my paper on the banking industry. I felt very proud of my work. However, he read through it and said, 'This is useless. What makes the stock go up and down?' That comment acted as a spur. Thereafter, I focused my analysis on seeking to identify the factors that were strongly correlated to a stock's price movement as opposed to looking at all the fundamentals. Frankly, even today, many analysts still don't know what makes their particular stocks go up and down.

All intelligent investing is value investing - acquiring more that you are paying for. You must value the business in order to value the stock.

Whenever you hear a discussion about the short-term swings in any given stock's price, your immediate thought should be whether it matters to why you are investing.

Warren Buffett is famous for talking about the 'intrinsic value' of stocks. But while many people parrot this phrase, few know what it really means.

When it comes to valuation, there's only one thing stock investors really care about, which is earnings.

Calculate a stock's price/earnings ratio yourself, using Graham's formula of current price divided by average earnings over the past three years.

I think you have to learn that there's a company behind every stock, and that there's only one real reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.

In market valuation, Yahoo is worth about as much Walt Disney and the News Corporation combined.

Everyone has the idea of owning good companies. The problem is that they have high prices in relations to assets and earnings, and that takes all of the fun out of the game.

In my business investing, you are buying a stock, and someone else is selling the stock. Right there, that's like a debate. Is the stock going up, or is it going to go down?

Who cares if companies are overvalued or not?

Just because a stock is down doesn't mean it's a great buy.

We don't prognosticate macroeconomic factors, we're looking at our companies from a bottom-up perspective on their long-run prospects of returning.

Stock price multiples are negatively correlated with real interest rates. As interest rates rise, the market multiple will fall.

I have always believed that a single talented analyst, working very hard, can cover an amazing amount of investment landscape, and this belief remains unchallenged in my mind.

The critical investment factor is determining the intrinsic value of a business and paying a fair or bargain price.

If you can follow only one bit of data, follow the earnings - assuming the company in question has earnings. I subscribe to the crusty notion that sooner or later earnings make or break an investment in equities. What the stock price does today, tomorrow, or next week is only a distraction.

They don't take eyeballs at the bank. Those who value stocks by eyeballs should go be ophthalmologists, not stock analysts. There is no cyberworld where reach trumps profits.

I believe that the mutual fund industry's biggest shortcoming is too much focus on the momentary price of a stock - an illusion - and too little focus on the intrinsic value of the corporation - the ultimate reality. I'm comforted by the fact that Warren Buffett feels the same way.

Knowledge is only one ingredient on arriving at a stock's proper price. The other ingredient, fully as important as information, is sound judgment.

A great company is not a great investment if you pay too much for the stock.

If I taught a class, on my final exam I would take an Internet company and ask, 'How much is this company worth?' Anyone who would answer, I would flunk.

The ideal form of common stock analysis leads to a valuation of the issue which can be compared with the current price to determine whether or not the security is an attractive purchase.

You must value the business in order to value the stock.