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8994d8e
|
Buffett found it 'extraordinary' that academics studied such things. They studied what was measurable, rather than what was meaningful. 'As a friend [Charlie Munger] said, to a man with a hammer, everything looks like a nail.
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charlie-munger
warren-buffett
measurement
meaningful
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Roger Lowenstein |
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2e56f74
|
The modern spirit is a hesitant one. Spontaneity has given way to cautious legalisms, and the age of heroes has been superseded by a cult of specialization. We have no more giants; only obedient ants.
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spirit
warren-buffett
specialization
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Roger Lowenstein |
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f03232d
|
Buffett's methodology was straightforward, and in that sense 'simple.' It was not simple in the sense of being easy to execute. Valuing companies such as Coca-Cola took a wisdom forged by years of experience; even then, there was a highly subjective element. A Berkshire stockholder once complained that there were no more franchises like Coca-Cola left. Munger tartly rebuked him. 'Why should it be easy to do something that, if done well two ..
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warren-buffett
investing
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Roger Lowenstein |
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2b35498
|
Buffett does enjoy being a billionaire, but in offbeat ways. As he put it, though money cannot change your health or how many people love you, it lets you be in 'more interesting environments.
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|
money
philosophy
warren-buffett
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Roger Lowenstein |
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d7f3339
|
Buffett's uncommon urge to chronicle made him a unique character in American life, not only a great capitalist but the Great Explainer of American capitalism. He taught a generation how to think about business, and he showed that securities were not just tokens like the Monopoly flatiron, and that investing need not be a game of chance. It was also a logical, commonsensical enterprise, like the tangible businesses beneath. He stripped Wall ..
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character
warren-buffett
capitalist
business
capitalism
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Roger Lowenstein |
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35870a1
|
A year earlier, no company had been accorded more faith than Enron; by late November, none was trusted less. And so, a gasping gurgle, a desperate SOS: Enron, the emblem of free markets, the champion of deregulation, reached into its depleted treasury and forked over $100,000 to each of the major political parties' campaign war chests. Then, it shuttered its online trading unit - its erstwhile gem. On November 28, Standard & Poor's downgrad..
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Roger Lowenstein |
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418d2ff
|
The great man is he who in the midst of the crowd keeps with perfect sweetness the independence of solitude.
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|
Roger Lowenstein |
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542a604
|
Buffett's genius was largely a genius of character--of patience, discipline, and rationality.
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|
Roger Lowenstein |
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ae8181e
|
Graham's first goal was never to make money--it was to avoid losing any.
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Roger Lowenstein |
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e2a72e0
|
If Wall Street is to learn just one lesson from the Long-Term debacle, it should be that. The next time a Merton proposes an elegant model to manage risks and foretell odds, the next time a computer with a perfect memory of the past is said to quantify risks in the future, investors should run--and quickly--the other way. On Wall Street, though, few lessons remain learned.
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Roger Lowenstein |
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d7f52d6
|
As Keyes noted, one bet soundly considered is preferable to many poorly understood.
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|
Roger Lowenstein |
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1c467fa
|
The book is worth reading, in part because it is enjoyable to read of other people's folly, not to mention their avarice and stupidity.
|
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|
Roger Lowenstein |
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f8c9ce1
|
As Fama put it, "Life always has a fat tail."
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|
Roger Lowenstein |
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ec6d9d8
|
Once a typhoon breaks loose in markets, there is no telling where it will go.
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|
Roger Lowenstein |
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16f4305
|
Merton ... humbly warned, however, "It's a wrong perception to believe that you can eliminate risk just because you can measure it."
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Roger Lowenstein |
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fe08459
|
Bundy sternly tool his fellow endowment fund managers to task - not for being too bold, but for being insufficiently so: We have the preliminary impression that over the long run caution has cost our colleges and universities much more than imprudence or excessive risk-taking.
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risk-taking
investing
|
Roger Lowenstein |
|
61b1095
|
Price is what you pay, value is what you get.
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|
|
Roger Lowenstein |
|
43d0dfd
|
The public shareholders who invested with Buffett also got rich, and in exactly the same proportion to their capital that Buffett did. The numbers themselves are almost inconceivable. If one had invested $10,000 when Buffett began his career, working out of his study in Omaha in 1956, and had stuck with him throughout, one would have had an investment at the end of 1995 worth $125 million.2
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|
|
Roger Lowenstein |
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2b79b09
|
A compact organization lets all of us spend our time managing the business rather than managing each other.
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|
leadership
organization
|
Roger Lowenstein |
|
3930f78
|
Being right on a stock had something of the purity of a perfect move in chess; it had an intellectual resonance.
|
|
|
Roger Lowenstein |
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5fe2e2c
|
With traders scrambling to pay back debts, Neal Soss, an economist at Credit Suisse First Boston, explained to the Journal, "You don't sell what you should. You sell what you can." By leveraging one security, investors had potentially given up control of all of their others. This verity is well worth remembering: the securities may be unrelated, but the same investors owned them, implicitly linking them in times of stress. And when armies o..
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Roger Lowenstein |
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c6a482a
|
As Keynes observed, there cannot be "liquidity" for the community as a whole. The mistake is in thinking that markets have a duty to stay liquid or that buyers will always be present to accommodate sellers. The real culprit in 1994 was leverage. If you aren't in debt, you can't go broke and can't be made to sell, in which case "liquidity" is irrelevant. But a leveraged firm may be forced to sell, lest fast-accumulating losses put it out of ..
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Roger Lowenstein |
|
8aa8a76
|
As the English essayist G. K. Chesterton wrote, life is "a trap for logicians" because it is almost reasonable but not quite; it is usually sensible but occasionally otherwise: "It looks just a little more mathematical and regular than it is; its exactitude is obvious, but its inexactitude is hidden; its wildness lies in wait"
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Roger Lowenstein |
|
3a34031
|
Lawrence Summers, now the U.S. Treasury secretary , told The Wall Street Journal after the crash, "The efficient market hypothesis is the most remarkable error in the history of economic theory."
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Roger Lowenstein |
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661f779
|
But after Kapor took Merton's finance course, he decided that quantitative finance was less a science than a faith - a doctrine for ideologues "blinded by the power of the model." It appealed to intellectuals who craved a sense of order but could lead them disastrously astray if markets moved outside the model."
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|
Roger Lowenstein |
|
6f17a5b
|
Finance is often poetically just; it punishes the reckless with special fervor.
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|
Roger Lowenstein |
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ae45774
|
A regulator is part protector, part godfather. He dislikes a public spectacle; he is most effective when he can wield his power discreetly, by merely threatening to act or by cajoling others to do his bidding.
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Roger Lowenstein |
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4fc7c77
|
No stigma was attached; second acts on Wall Street are as common as they are in politics. Perhaps one cycle, be it an election cycle or an economic cycle, is the extent of the public's memory.
|
|
|
Roger Lowenstein |
|
b2ddf9c
|
Three questions divided reformers: Who should issue the new currency? To what degree should the system be centralized? And should bankers or politicians be in control?
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|
|
Roger Lowenstein |
|
726e329
|
Warburg rifled off a congratulatory note to Owen. He revealed his true feelings about the Senate (including Owen) to a fellow European, to whom he groused, "It is a terribly tiring business to try to influence these hundred obstinate and ignorant men."
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Roger Lowenstein |
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3a117ad
|
His talent sprang from his unrivaled independence of mind and ability to focus on his work and shut out the world, yet those same qualities exacted a toll.
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|
Roger Lowenstein |
|
a335af3
|
Warburg hesitated before daring to reply. "Your bank is so big and so powerful, Mr. Stillman, that when the next panic comes, you will wish your responsibilities were smaller."
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|
Roger Lowenstein |
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b373a68
|
Regardless of how earnestly bankers trumpeted the virtues of laissez-faire, in times of unrest markets looked to Washington to provide stability.
|
|
|
Roger Lowenstein |
|
63b6cbe
|
While a losing trade may well turn around eventually (assuming, of course, that it was properly conceived to begin with), the turn could arrive too late to do the trader any good - meaning, of course, that he might go broke in the interim.
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Roger Lowenstein |
|
d77bb2d
|
Glass's nature was to fret. He was intensely agitated by the pressure from bankers for a centralized scheme and worried that bankers had gotten to Wilson (a suspicion, of course, that was entirely correct).
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|
Roger Lowenstein |
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b6100d6
|
Backed by their models, they felt more certain than others did - almost invincible. Given enough time, given enough capital, the young geniuses from academe felt they could do no wrong
|
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|
Roger Lowenstein |
|
5197a17
|
America's abandonment of the gold standard would have shocked the founders, who took for granted that money had to be more than mere paper. More than anything, going off gold (which occurred in stages, culminating under Nixon) expanded the Fed's charter. It made the agency the supreme arbiter
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|
Roger Lowenstein |
|
1be9b72
|
Prophesy as much as you like, but always hedge. - Oliver Wendell Holmes, 1861
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|
Roger Lowenstein |
|
9639301
|
Investors long for steady waters, but paradoxically, the opportunities are richest when markets turn turbulent.
|
|
|
Roger Lowenstein |
|
26805e7
|
As Peter Bernstein has written, nature's pattern emerges only from the chaotic disorder of many random events.
|
|
|
Roger Lowenstein |
|
f9ae580
|
For men who prided themselves on being disciples of reason, their drive to live on the edge seemd inexplicable, unless they believed that becoming the richest would certify them as also being the smartest.
|
|
|
Roger Lowenstein |
|
00d68ed
|
When you need money, Wall Street is a heartless place.
|
|
|
Roger Lowenstein |
|
b46269f
|
And in the late summer of 1998, the bond-trading crowd was extremely fearful, especially of risky credits. The professors hadn't modeled this. They had programmed the market for a cold predictability that it had never had; they had forgotten the predatory, acquisitive, and overwhelming protective instincts that govern real-life traders. They had forgotten the human factor.
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|
Roger Lowenstein |
|
fcdfd32
|
The moment was highly polarizing. Populists agitated for an income tax, tariff reform, regulation of railroads, and direct election of U.S. senators (who were chosen by the legislatures). Workers erupted in sometimes violent strikes--notably, the Pullman strike of 1894, which halted much of the nation's rail traffic and led to rioting and acts of sabotage, and was ultimately suppressed by federal troops.
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Roger Lowenstein |