Barry Ritholtz Quotes

The consumption and production of energy is a major component of the global economy.

You can blow on the dice all you want, but whether they come up 'seven' is still a function of random luck.

We love a tale of heroes and villains and conflicts requiring a neat resolution.

Many hedge fund managers have become billionaires; perhaps this - plus their reputations as the smartest guys in the room - is why they have captured the investing public's imagination.

What you pay for an investment is the single biggest determinant for how successful that investment will be. When equity prices are high, your returns will be lower. When they are cheap, your returns will be higher.

Secular cycles are the long periods - as long as decades - that come to define each market era. These cycles alternate between long-term bull and bear markets.

Much of the traditional thinking about cash is well intentioned but unrealistic. Should you have six months of living expenses in the bank for emergencies? Sure. Do you? Probably not.

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.

The market is going to love it. The market always seems to applaud major mergers, even though the vast majority of them don't work out and don't increase shareholder value.

For those of you who may be unaware, [Michael] Boskin is the economist/weasel/fraud who helped to officially distort the CPI, making it more or less worthless as a measure of inflation. The Boskin Commission ... was an act of cowardice. Rather than man up and say fix this, its broken, we can't afford it ...

Mutual fund managers want your money in their funds. They get paid based on assets under management.

Have a well-thought financial plan that is not dependent upon correctly guessing what will happen in the future.

Once you research an idea, you begin to develop a perspective. Writing about anything in public, often in real time, has helped fashion my views.

Never forget this simple truism: Forecasting is marketing, plain and simple.

I credit Google for having the foresight to identify threats to its main business of selling advertising against search results. The potential loss of market share in the mobile space led them to the Android acquisition.

No one knows what the top-performing asset class will be next year. Lacking this prescience, your next-best solution is to own all of the classes and rebalance regularly.

The good news is that economists are intelligent, engaging and often charming folks. The bad news is their work is often of little use to investors.

How are the cabs in your city? In Manhattan, where I work, they are rather awful.

In social media, people cannot build big followings organically unless what they are putting out to the world has value.

If you have read me for any length of time, you know I am less than enthralled with much of what passes for financial news.

You want less of the annoying nonsense that interferes with your portfolios and more of the significant data that allow you to become a less distracted, more purposeful investor.

Most of the time, economic data is fairly benign. I don't wish to imply it is meaningless, but it is not a driver of stock markets. Indeed, the correlation between economic noise and how equity markets perform has been wildly overemphasized.

Here is a dirty little secret: Stock-picking is wildly overrated. Sure, it makes for great cocktail party chatter, and what is more fun than delving into a company's new products? But the truth is that individual stocks are riskier than broad indices.

To know whether stocks are cheap or pricey, we typically look at price-to-earnings ratio. Valuation is a tougher question than many folks realize.

Rather than engage in the sort of selective retention that so many investors tend to do and pretend mistakes never happened, I prefer to 'own' them. This allows me to learn from them and, with any luck, avoid making the same errors again.

When it comes to investing, you are your own worst enemy.

Whenever I see a forecast written out to two decimal places, I cannot help but wonder if there is a misunderstanding of the limitations of the data, and an illusion of precision.

Unlike cheap stocks, inexpensive asset classes have a lower chance of big drawdowns (broad asset classes don't go to zero) and a higher probability of average or better returns.

The electronics industry expanded rapidly and the seeds for the semiconductor and software revolution were planted. The postwar period also saw the suburbanization of America, the rise of the homeowner, the build-out of the interstate highway system, and the rise of automobile culture. Credit availability expanded dramatically.

Narrative drives most of economics. Everything seems to be part of a story, and how that story is told often leads to critical error.

Shopmas now begins on Thanksgiving Day. Apparently, escaping the families you cannot stand to spend another minute with on Thanksgiving Day to go buy them gifts is how some Americans show their affection for one another. Weird.

The bottom line is this: Cash, in modest increments, has a role in any portfolio. But unless you are Warren Buffett, you should limit it to 2 or 3 percent.

Twitter has become a group conversation of that type that used to take place on trading floors.

Getting more and more of our news from the social network is having significant repercussions for markets - and your money.

Google's founders have had a good eye for imagining what technologies will be significant in the near future. No one asked Google to develop self-driving cars, but it helped them with street views for Google Maps.

A number of bloggers in economics and the financial sector have risen to prominence through the sheer strength of their work. Note it was not their family connections nor ties to Ivy League schools or elite banks, but rather the strength of their research, analysis and writing.

I find it funny that people who didn't think there was any inflation in the pipeline are now talking about stagflation. This is nothing like the 1970's, which was a pretty dismal period and not just because of polyester and disco.

Even when you are right, there are costs and taxes associated with being tactical. When you are wrong, there are opportunity costs.

Content is king. When you are asking people to read you several times a day, you better have some fine content.

Forecasting is simply not a strength of the species; we are much better with tools and narrative storytelling.

You, your employer and your plan's investment managers fail to follow even the most basic rules of investing. You overtrade, chase performance, do not think long term. All of you - All Of You - have done a horrible job managing your retirement plans.

You have a natural tendency to want an emotionally satisfying tale - and to make investments based on that - despite times when the actual data may be telling you something different.

When it comes to investing, there is no such thing as a one-size-fits-all portfolio.

The ability to select stocks, manage them over time and know when to sell them is incredibly difficult, even for professional fund managers.

With Twitter, you can build your own virtual trading floor and research department, populated by the smartest people on earth. Almost any subject or sector has you can think of, you can find a few people with an expertise in that area.

Whenever you try to pick market tops and bottoms, you are making a prediction. Guessing what stock is going to outperform the market is forecasting, as is selling a stock for no apparent reason. Indeed, nearly all capital decisions made by most people are unconscious predictions.

Amongst the financial Twitterati, the term 'muppets' has come to describe any client used and abused by some financial predator. I've adopted the term to describe portfolios that have been assembled for purposes other than serving the clients' best interests.

Footage of people camped out at Best Buy or elsewhere is not remotely a celebration. Rather, it's a reminder of just how economically distressed a large percentage of our populace is.

If you are not making any mistakes, you are being excessively risk-averse. Investing involves risk, and that means you will occasionally be wrong. And although it is okay to be wrong, it is not okay to stay wrong.

Investing is about making probabilistic decisions with limited information about an unknowable future. The variables are well known, as are the possible outcomes.

History is replete with examples of tech firms that were marginalized by new companies and technologies.

If I am going to trash others for their dumb predictions, I must at least hold myself to the same sort of accountability.

As investors, we want to believe we are smart, insightful and uniquely talented - even though we often fail to do the heavy lifting, put in the long hours, and make the uncomfortable but necessary decisions to achieve success.

People forget that although we can pinpoint the price, we can only guess at future earnings. The past isn't much help: It simply tells whether a market was pricey or cheap.

There is a shortage of doctors, and the American Medical Association is aiming to keep it that way.

Despite all the media coverage, glitz and glam of hedge funds, they have not done well for their investors. They have high - some say excessively high - fees; their short- and long-term performance has been poor.

It is important for investors to understand what they do and don't know. Learn to recognize that you cannot possibly know what is going to happen in the future, and any investment plan that is dependent on accurately forecasting where markets will be next year is doomed to failure.

It is in your DNA to love a good story. You know, neat tales with heroes and villains and conflicts to resolve. A good story pushes our buttons, is exciting and memorable.

Owning a variety of asset classes means that some part of your portfolio will be doing well when the cyclical turmoil arises. A broadly diversified portfolio includes large capitalization stocks, small cap, emerging markets, fixed income, real estate and commodities.

People who work in specialized fields seem to have their own language. Practitioners develop a shorthand to communicate among themselves. The jargon can almost sound like a foreign language.

When you buy anything with lots of leverage, it does not require a whole lot to go wrong to lose it all.

Commissions add up, taxes are a big drag, margin ain't cheap. A good accountant costs money as well. The math on this one is obvious, yet investors often fail to recognize it: Keep your costs low and your turnover lower, and you will win in the end.

One thing I detest most about the financial press is the lack of accountability. All sorts of nonsense is said without penalty.

The beauty of diversification is it's about as close as you can get to a free lunch in investing.

When markets are rallying, cash in the portfolio is a drag on performance, returning about zero.

Keynes vs Hayek? Friedman vs Krugman? Those are the wrong intellectual debates. Its you vs. Tony Hayward, BP CEO, You vs. Lloyd Blankfein, Goldman Sachs CEO. And you are losing ...

Active management leads to lots of poor investor behavior. It sends people chasing after whoever has the hot hand at the moment.

In New York, the former lack of real competition allowed taxis to extract excessive charges, regardless of the poor service.