You have to be willing to look wrong for a long time before you look right. The market has no obligation to validate your thesis on your schedule.

Mimicking the herd invites regression to the mean. You will never produce a superior performance unless you do something different from the majority — and that is harder than it sounds, because the majority is usually wrong about enough things to be dangerous, but right about enough things to be seductive.

The biggest risk of all is not taking one. Growth and comfort do not coexist. Every time I see a company protecting its core business rather than cannibalizing it, I know a competitor will do it for them—and far less gently.

Risk means more things can happen than will happen. The practical definition of risk is not volatility or a standard deviation — it's the possibility of permanent loss of capital. Volatility is opportunity dressed in frightening clothes.

The market for something to believe in is infinite. But the market for something that actually works is much smaller, and far more competitive. Most investors confuse the two.

The ability to destroy value is not confined to bad businesses. A great business bought at too high a price, or managed by people who can't resist the temptation to allocate capital to adjacencies, will also destroy value. The label 'great business' is not a perpetual warranty.

We are more ready to try the untried when what we do is inconsequential. Hence the fact that many inventions had their birth as toys.

Mimicking the herd invites regression to the mean. You will never produce a superior investment record by buying what everybody else is buying. The decisions that look best in retrospect are often the ones that felt most uncomfortable at the time.

The biggest mistake investors make is to believe that what happened in the recent past is likely to persist. They assume that something that was a good investment in the recent past is still a good investment. Typically, high past returns simply imply that an asset has become more expensive and is a less compelling investment.

The stock market is filled with individuals who know the price of everything, but the value of nothing. The secret to investing is to figure out the value of something — and then pay a lot less for it.

The best investors I know have a strong view about the future, but they hold it loosely — they're always looking for evidence that they're wrong. Conviction without flexibility is just stubbornness dressed up as confidence.

The fly that doesn't want to be swatted is most secure when it lights on the fly-swatter.

It is not the same to talk of bulls from behind the barriers as to be in the bullring. I have been in the bullring, and I know that fear is not in the legs but in the soul.

The biggest constraint on the returns of a large investor is the investor himself. Most people think they need more information, better models, faster data. But the actual binding constraint is almost always temperament — the ability to hold a variant view, in size, for a long time, while being wrong in ways that are publicly visible.

The biggest risk isn't that you'll lose money — it's that you'll succeed, and then make a bigger, more confident bet on something you don't actually understand as well as you think you do.

Diversification is a protection against ignorance. It makes very little sense for those who know what they're doing.

The chain of logical steps from 'this is a good company' to 'this is a good investment at any price' is one of the most dangerous in finance. Quality is not the same as value, and confusing the two has ruined more intelligent people than stupidity ever has.

Most people think the opposite of success is failure, but that's not true. The opposite of success is quitting. Failure is just a learning event. Companies that never fail are companies that never try anything new.

Risk means more things can happen than will happen. The job of a good investor isn't to predict which one occurs — it's to ensure you survive the ones you didn't predict.

The idea that a bell rings to signal when investors should get into or out of the market is simply not credible. After nearly fifty years in this business, I don't know anybody who has done it successfully and consistently. I don't even know anybody who knows anybody who has done it successfully and consistently.

Failure is an option here. If things are not failing, you are not innovating enough. The key is to make your mistakes quickly and cheaply, not slowly and expensively.

Leverage is the only way a smart person can go broke. You really can do smart things and have it end in disaster if you introduce time pressure and debt into the equation.

Mimicking the herd invites regression to the mean. If your portfolio looks like everyone else's, you may feel comfortable, but all you can expect is average performance. It's only by departing from the consensus that you can achieve superior results — but departing from the consensus is where career risk lives, and most investors won't do it.

The biggest investing errors come not from factors that are informational or analytical, but from those that are psychological. Investor psychology creates the extremes of valuation — and thus the most important opportunities and risks.

The trouble with most people is that they think with their hopes or fears or wishes rather than with their minds. The investor who says 'This time it's different' when in fact it's the four most dangerous words in investing, is the same person who confuses familiarity with safety.

The biggest source of investment mistakes is not stupidity or ignorance but the illusion of knowledge — the investor who knows just enough to construct a plausible story, and mistakes that story for analysis.

Most people think that if they just had more information, they'd make better decisions. But the problem is rarely a lack of information — it's that we don't want to believe what the information is telling us.

The human race has had long experience and a fine tradition in surviving adversity. But we now face a task for which we have little experience, the task of surviving prosperity.

The single greatest edge an investor can have is a long-term orientation that isn't merely stated but is structurally enforced — meaning your capital, your clients, and your own psychology are all aligned so that you literally cannot sell at the wrong time.

The risk of paying too high a price for good-quality stocks is not the chief hazard for the thoughtful, enterprising investor — his chief hazard is the adoption of unsound principles or inapplicable methods under conditions of excitement and stress.

The lesson of history is that there have always been more buyers of stability than sellers of it. When uncertainty rises, the price of certainty rises with it — and those willing to sell certainty at that moment earn returns that compound for decades.

Most people think of risk as the probability of losing money. But the real risk is behaving in a way today that prevents you from being in the game tomorrow. Permanent impairment of capital is far less common than permanent impairment of judgment under pressure.

The stock promoter sells sizzle, but the great investor buys the business nobody is talking about yet. Most of the time the exciting story and the good investment are mutually exclusive — the more compelling the narrative, the more the price has already discounted the future.

Risk means more things can happen than will happen. The dangerous investor is not the one who doesn't know what will happen, but the one who doesn't know what he doesn't know.