Why do good traders repeat the identical errors era after era? As a result of monetary instincts — like concern, envy, and overconfidence — are historic, cussed, and terribly unsuited for contemporary markets. Happily, monetary historical past leaves behind a paper path of knowledge, wit, and hard-won classes. Typically, a single quote can do extra to appropriate a nasty behavior than 100 charts.
That’s what introduced us collectively. On March 19, 2025, I met Rachel Kloepfer. It was proper after my keynote presentation on the Second Annual Institute of Superior Funding Administration (IAIM) convention on the College of Utah. My speak emphasised how traders can use monetary historical past to realize a deeper understanding of present monetary occasions and a clearer imaginative and prescient of the long run. I closed with a couple of quotes from the previous — concise and enduring truths which I hoped attendees might use to make higher selections.
Afterward, Rachel — a former journalist and fellow monetary historical past fanatic — advised increasing the listing. We sifted by means of a whole bunch of quotes. Some are severe, some are humorous, however all come from individuals who lived by means of the monetary highs and lows of the previous 200 years.
The result’s a curated set of 30 quotes completely for Enterprising Investor grouped by the vices to keep away from, the virtues to undertake, and a bit of humor to remain sane by means of all of it. We selected timeless quotes designed to resonate throughout generations, reminders that whether or not you’re new to investing or a long time into your profession, historical past nonetheless has one thing to show you.
VICES
Probably the most tragic errors in finance are these we might have prevented — if solely we had realized from the previous. But these errors persist as a result of our instincts, as soon as important for survival, typically backfire in markets. Till evolution catches up, our greatest treatment is historic consciousness. The quotes that comply with spotlight among the most damaging investor vices. Committing them to reminiscence will help you resist these patterns — and free the psychological capability wanted to domesticate extra productive virtues.
Envy
“Nothing so undermines your monetary judgement because the sight of your neighbor getting wealthy.”
—J. PIERPONT MORGAN, financier
Impatience
“The delusion lies within the conception of time. The good stock-market bull seeks to condense the long run into a couple of days, to low cost the lengthy march of historical past, and seize the current worth of all future riches. It’s [their] strident demand for every thing proper now — to personal the long run in cash proper now — that can’t tolerate even the notion of futurity.”
—JAMES BUCHAN, creator of Frozen Need: The Which means of Cash
Dishonesty
“A enterprise mannequin that depends on trickery is doomed to fail.”
—CHARLIE MUNGER, late vice chairman of Berkshire Hathaway
Hubris
“The weak point of human nature prevents males from being good judges of their very own deservings.”
—LOUIS BRANDEIS, creator of Different Folks’s Cash
Overconfidence
“When a speculator wins, he don’t cease until he loses.”
—GEORGE H. LORIMER, nineteenth century service provider
Complacency
“At all times do not forget that someplace somebody is making a product that can make your product out of date.”
—GEORGES DORIOT, founding father of enterprise capital
Denial
“Confronted with the selection between altering one’s thoughts and proving that there is no such thing as a want to take action, nearly everyone will get busy on the proof.”
—JOHN KENNETH GALBRAITH, monetary historian
Overthinking
It’s exceptional how a lot long-term benefit individuals like us have gotten by attempting to be persistently not silly, as an alternative of attempting to be very clever.”
—CHARLIE MUNGER, late vice chairman of Berkshire Hathaway
Herd Conduct
“As soon as a majority of gamers adopts a heretofore contrarian place, the minority view turns into the broadly held perspective.”
—DAVID SWENSEN, late CIO of the Yale College Endowment
Blind Religion
“The investing public is fascinated and captured by the nice monetary thoughts. That fascination derives, in flip, from the dimensions of the monetary operations and the sensation that, with a lot cash concerned, the psychological assets behind them can’t be much less.”
—JOHN KENNETH GALBRAITH, monetary historian
VIRTUES
Shedding dangerous instincts is simply the start. The subsequent step is to fill that area with virtues — a much more troublesome job. Vices are widespread and instinctive; virtues are behavioral anomalies. Probably the most highly effective virtues are uncommon, straightforward to dismiss, and even simpler to overlook. The next 10 quotes come from monetary minds who efficiently navigated among the most unforgiving markets in US historical past. Committing them to reminiscence is a strong subsequent step towards turning into a more proficient investor.
Ardour
“All of the genius I’ve lives on this: when I’ve a topic in hand, I examine it profoundly. Day and night time it’s earlier than me. My thoughts turns into pervaded with it. Then the trouble that I’ve made is what individuals are happy to name the fruit of genius. It’s the fruit of labor and thought.”
—ALEXANDER HAMILTON, first US Secretary of the Treasury
Thrift
“I smoke four-cent cigars and I like them. If I had been to smoke higher ones, I’d lose my style for a budget ones that I now discover fairly passable.”
—EDWARD ROBINSON, father of Hetty Inexperienced, the Queen of Wall Road
Self-Self-discipline
“A number of a long time would move, and plenty of vicissitudes to be undergone earlier than I might grasp the only and most necessary of all the principles of fabric welfare: Probably the most good monetary technique consists of residing effectively inside one’s means.”
—BENJAMIN GRAHAM, founding father of the worth investing philosophy
Competence
“A small bunch of people that know what they’re doing can accomplish greater than a giant group of people that don’t know what they’re doing.”
—ROBERT NOYCE, founding father of Intel Company
Historic Consciousness
“You may’t actually perceive what’s going on now except you perceive what got here earlier than.”
—STEVE JOBS, founding father of Apple Laptop
Training
“Correct schooling is one lengthy train in augmentation of excessive cognition in order that our knowledge turns into sturdy sufficient to destroy fallacious pondering maintained by resistance to alter.”
—CHARLIE MUNGER, late vice chairman of Berkshire Hathaway
Humility
“There’s a prudent maxim of the financial forecaster’s commerce that’s too typically ignored: Choose a quantity or choose a date, however by no means each.”
—PAUL A. VOLCKER, late chairman of the Federal Reserve
Warning
“In enterprise, don’t shut a cut price till you may have mirrored upon it in a single day.”
—HETTY GREEN, the Queen of Wall Road
Perspective
“A peaceful and modest life brings extra happiness than the pursuit of success mixed with fixed restlessness.”
—ALBERT EINSTEIN, Nobel Prize Successful Physicist
Self-Consciousness
“There may be one set of administration abilities wanted to start out an organization and one other set wanted to handle a much bigger firm. They’re hardly ever resident in the identical particular person.”
—DON VALENTINE, founding father of Sequoia Capital
HUMOR
Finance and investing will not be generally related to humor, however when human vices are stretched to their limits, they typically produce conditions so outrageous it’s laborious to not chortle. The next set of quotes comes from witnesses to among the extra insane moments in U.S. monetary historical past. We hope you could find humor within the madness.
“I attempt to spend money on companies which can be so great that an fool can run them. As a result of in the end, one will.”
—WARREN BUFFETT, chairman of Berkshire Hathaway
“Within the historical past of each nice disaster, you will see that some masterly little bit of stupidity set hearth to the oil-soaked rags.”
—EDWIN LEFEVRE, monetary journalist
“Intervals of speculative frenzy at all times draw each scoundrels and suckers to Wall Road, the best way a three-alarm hearth attracts onlookers and pickpockets.”
—ROBERT SOBEL, monetary historian
“I’ve a number of enemies…I let you know the satan would concern me, as a lot of his satellites do right here.”
—HETTY GREEN, the Queen of Wall Road
“It was an absurd signal of the occasions that ‘enhanced leverage’ had develop into a promoting level for an funding car, as an alternative of a warning; it was like naming a brand new automotive mannequin after its defective brakes.”
—TIMOTHY GEITHNER, former secretary of the Treasury
“Upon discovering the character of the ruse, their rage was, as might be imagined, unbounded however fruitless, and so they had been obliged to content material themselves with asserting in a really emphatic method that if [Jacob] Little ever visited Boston, he would inevitably half firm together with his ears.”
—WILLIAM ARMSTRONG, a reformed inventory gambler (1848)
“When you have any cash in that place [the Knickerbocker Trust], get it out the very first thing tomorrow. The boys in that financial institution are too good wanting. You mark my phrases.”
—HETTY GREEN, the Queen of Wall Road
“Males have been swindled by different males on many events. The Autumn of 1929 was, maybe, the primary event when males succeeded on a big scale in swindling themselves.”
—JOHN KENNETH GALBRAITH, monetary historian
“As a common rule of thumb, the extra complexity in a Wall Road creation, the sooner and additional traders ought to run.”
—DAVID SWENSEN, late CIO of the Yale Investments Workplace
“The commonest exit technique was that we misplaced all our cash.”
—JACK MELCHOR, enterprise capitalist
CLOSING THOUGHTS
The 235-year historical past of US finance is full of scoundrels, schemes, and spectacular missteps. So it’s truthful to ask: How can we stay assured in such a system? The reply is that monetary historical past can also be wealthy with heroism, ingenuity, and selflessness — forces which have steadily pushed progress. The trail ahead is rarely linear, however over time, this technique has labored higher than the alternate options.
That’s why it’s important to bridge generational gaps within the funding trade and be sure that future leaders profit from the hard-earned classes of the previous. As information compounds, so can also a extra traditionally knowledgeable and self-aware monetary system.
Like most of the insights shared right here, this one isn’t new. In 1940, Fred Schwed Jr. wrote The place Are the Clients’ Yachts?, a basic that skewered Wall Road with unmatched humor — and nonetheless arrived on the similar conclusion we’ve. Capitalism is flawed, but it surely works. So we’ll let Schwed Jr. have the ultimate phrase. Regardless of our greatest efforts, we merely couldn’t say it higher.
“I’ve a sneaking fondness for that wretched outdated hag, the capitalistic system, after watching the efficiency of her temperamental youthful rivals. I consider we had higher protect our monetary equipment even with a lot of the nonsense nonetheless adhering to it. The best way we’ve been introduced up, all of us have a passion for articles which might solely be made in vegetation costing hundreds of thousands of {dollars}. Few of those articles may be produced by a fellow and his uncle working behind the storage. The one profitable technique to date devised for getting hundreds of thousands out of the general public, for enterprises each good and unhealthy, is a few system just like the devious mechanisms of Wall Road. (Cash has sometimes been raised from the general public by smacking the residents with the broad aspect of a saber, however the outcomes of this had been at all times lower than passable).
I’m prepared to submit an thought to the SEC that maybe they’ve considered themselves: they’re within the place of a physician who has just one affected person, with no prospect of getting one other. It will be a tactical error to kill this affected person, regardless that a commendable scientific zeal prompts the physician to check out his complete shelf of pharmacopoeia on him. In any case, there is no such thing as a actual hazard on this case of the affected person ever turning into cured.”
—FRED SCHWED JR., creator of The place are the Clients’ Yachts
