If I am going to trash others for their dumb predictions, I must at least hold myself to the same sort of accountability. – Barry Ritholtz
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. – Barry Ritholtz
Indeed, eventually, random outcomes all revert to the mean, meaning that streaks eventually end. Understanding this is a key part of intelligent and rational investing. – Barry Ritholtz
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. – Barry Ritholtz
When it comes to investing, there is no such thing as a one-size-fits-all portfolio. – Barry Ritholtz
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. – Barry Ritholtz
Often, investors will discover a manager after he’s had a terrific run, usually when he lands on a magazine cover somewhere. Invariably, funds swell up with new investor money just before they revert to their long-term averages. – Barry Ritholtz
We must recognize our own behavioral errors. To be blunt, you are not likely to become a cognitive Zen master anytime soon. But a little enlightenment could keep you from making some common investing errors. – Barry Ritholtz
Any investment bought via credit always runs the risk of margin calls and, eventually, liquidation. – Barry Ritholtz
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. – Barry Ritholtz
The simple reality of life is that everyone is wrong on a regular basis. By confronting these inevitable errors, you allow yourself to make corrections before it is too late. – Barry Ritholtz
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. – Barry Ritholtz
There is a shortage of doctors, and the American Medical Association is aiming to keep it that way. – Barry Ritholtz
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. – Barry Ritholtz
TV producers want ratings and are willing to do nearly anything to get them. They gin up artificial conflicts and create an urgency for even the most minor of economic data points. – Barry Ritholtz
Active management leads to lots of poor investor behavior. It sends people chasing after whoever has the hot hand at the moment. – Barry Ritholtz
When markets are rallying, cash in the portfolio is a drag on performance, returning about zero. – Barry Ritholtz
Hedge fund managers charge so much more than mutual fund managers; alpha is even harder to come by. They end up selling a variety of things beyond mere outperformance. – Barry Ritholtz
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. – Barry Ritholtz
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. – Barry Ritholtz
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. – Barry Ritholtz
The data strongly suggest that very good years in the U.S. stock market are followed by more good years. – Barry Ritholtz
The beauty of diversification is it’s about as close as you can get to a free lunch in investing. – Barry Ritholtz
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. – Barry Ritholtz
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. – Barry Ritholtz
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. – Barry Ritholtz
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. – Barry Ritholtz
Have a well-thought financial plan that is not dependent upon correctly guessing what will happen in the future. – Barry Ritholtz