Why do good traders repeat the identical errors era after era? As a result of monetary instincts — like worry, envy, and overconfidence — are historical, cussed, and terribly unsuited for contemporary markets. Fortuitously, 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 discuss emphasised how traders can use monetary historical past to achieve 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 choices.
Afterward, Rachel — a former journalist and fellow monetary historical past fanatic — recommended 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 just a little 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
Essentially the most tragic errors in finance are these we might have prevented — if solely we had discovered from the previous. But these errors persist as a result of our instincts, as soon as important for survival, usually backfire in markets. Till evolution catches up, our greatest treatment is historic consciousness. The quotes that observe spotlight a number of the most damaging investor vices. Committing them to reminiscence might 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 nice 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 the whole lot proper now — to personal the long run in cash proper now — that can’t tolerate even the notion of futurity.”
—JAMES BUCHAN, writer of Frozen Need: The That 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, writer 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 keep in mind 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 isn’t any want to take action, virtually everyone will get busy on the proof.”
—JOHN KENNETH GALBRAITH, monetary historian
Overthinking
It’s outstanding how a lot long-term benefit folks like us have gotten by attempting to be constantly not silly, as an alternative of attempting to be very clever.”
—CHARLIE MUNGER, late vice chairman of Berkshire Hathaway
Herd Habits
“As soon as a majority of gamers adopts a heretofore contrarian place, the minority view turns into the extensively held perspective.”
—DAVID SWENSEN, late CIO of the Yale College Endowment
Blind Religion
“The investing public is fascinated and captured by the good 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 sources behind them can’t be much less.”
—JOHN KENNETH GALBRAITH, monetary historian
VIRTUES
Shedding dangerous instincts is barely the start. The subsequent step is to fill that area with virtues — a much more troublesome job. Vices are frequent and instinctive; virtues are behavioral anomalies. Essentially the most highly effective virtues are uncommon, simple to dismiss, and even simpler to neglect. The next 10 quotes come from monetary minds who efficiently navigated a number of the most unforgiving markets in US historical past. Committing them to reminiscence is a robust 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 research it profoundly. Day and night time it’s earlier than me. My thoughts turns into pervaded with it. Then the hassle that I’ve made is what persons 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 have 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 Avenue
Self-Self-discipline
“A number of a long time would move, and lots of vicissitudes to be undergone earlier than I might grasp the only and most necessary of all the foundations of fabric welfare: Essentially the most sensible monetary technique consists of dwelling 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 possibly can’t actually perceive what’s going on now except you perceive what got here earlier than.”
—STEVE JOBS, founding father of Apple Laptop
Schooling
“Correct training is one lengthy train in augmentation of excessive cognition in order that our knowledge turns into sturdy sufficient to destroy incorrect considering 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 usually 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’ve mirrored upon it in a single day.”
—HETTY GREEN, the Queen of Wall Avenue
Perspective
“A relaxed and modest life brings extra happiness than the pursuit of success mixed with fixed restlessness.”
—ALBERT EINSTEIN, Nobel Prize Profitable Physicist
Self-Consciousness
“There may be one set of administration abilities wanted to begin an organization and one other set wanted to handle an even bigger firm. They’re not often resident in the identical individual.”
—DON VALENTINE, founding father of Sequoia Capital
HUMOR
Finance and investing aren’t generally related to humor, however when human vices are stretched to their limits, they usually produce conditions so outrageous it’s exhausting to not snicker. The next set of quotes comes from witnesses to a number of the extra insane moments in U.S. monetary historical past. We hope you could find humor within the madness.
“I attempt to put money into 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 discover 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 Avenue, the best way a three-alarm hearth attracts onlookers and pickpockets.”
—ROBERT SOBEL, monetary historian
“I’ve plenty of enemies…I let you know the satan would worry me, as lots of his satellites do right here.”
—HETTY GREEN, the Queen of Wall Avenue
“It was an absurd signal of the occasions that ‘enhanced leverage’ had grow to be a promoting level for an funding automobile, 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 could be imagined, unbounded however fruitless, they usually have 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 along with his ears.”
—WILLIAM ARMSTRONG, a reformed inventory gambler (1848)
“You probably have any cash in that place [the Knickerbocker Trust], get it out the very first thing tomorrow. The lads in that financial institution are too good trying. You mark my phrases.”
—HETTY GREEN, the Queen of Wall Avenue
“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 Avenue creation, the quicker 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 stuffed with scoundrels, schemes, and spectacular missteps. So it’s honest 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 isn’t linear, however over time, this method has labored higher than the options.
That’s why it’s important to bridge generational gaps within the funding business and be certain that future leaders profit from the hard-earned classes of the previous. As data compounds, so can also a extra traditionally knowledgeable and self-aware monetary system.
Like lots 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 Avenue with unmatched humor — and nonetheless arrived on the identical conclusion we’ve. Capitalism is flawed, however it 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 previous hag, the capitalistic system, after watching the efficiency of her temperamental youthful rivals. I imagine we had higher protect our monetary equipment even with a lot of the nonsense nonetheless adhering to it. The way in which we’ve been introduced up, all of us have a passion for articles which may solely be made in vegetation costing thousands and thousands of {dollars}. Few of those articles could be produced by a fellow and his uncle working behind the storage. The one profitable technique to date devised for getting thousands and thousands out of the general public, for enterprises each good and unhealthy, is a few system just like the devious mechanisms of Wall Avenue. (Cash has sometimes been raised from the general public by smacking the residents with the broad facet of a saber, however the outcomes of this have 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, although a commendable scientific zeal prompts the physician to check out his entire shelf of pharmacopoeia on him. In spite of everything, there isn’t any actual hazard on this case of the affected person ever turning into cured.”
—FRED SCHWED JR., writer of The place are the Clients’ Yachts
