1. The gulf between a great company and a great investment can be extraordinary.
2. Markets go through at least one big pullback every year, and one massive pullback every decade. Get used to it. It’s just what they do.
3. There is virtually no accountability in the financial pundit arena. People who have been wrong about everything for years still draw crowds.
4. There are tens of thousands of professional money managers. Statistically, a handful of them have been successful by pure chance.
5. On that note, some investors who we call “legendary” have barely, if at all, beaten an index fund over their careers. On Wall Street, big wealth isn’t indicative of big returns.
6. During Recessions, Elections, and Federal Reserve Policy Meetings, people become unshakably certain about things they know nothing about.
7. The more comfortable an investment feels, the more likely you are to be slaughtered.
8. Time-saving tip: Instead of trading penny stocks, just light your money on fire. Same for leveraged ETFs.
9. Not a single person in the world knows what the market will do in the short run. End of the story.
10. The analyst who talks about his mistakes is the guy you want to listen to. Avoid the guy who doesn’t — his are much bigger.
11. You don’t understand a big bank’s balance sheet. The people running the place and their accountants don’t, either.
12. There will be 7 to 10 recessions over the next 50 years. Don’t act surprised when they come.
13. Thirty years ago, there was one hour of market TV per day. Today there’s upwards of 18 hours. What changed isn’t the volume of news, but the volume of nonsense.
14. Warren Buffett’s best returns were achieved when markets were much less competitive. It’s doubtful anyone will ever match his 50-year record.
15. Most of what is taught about investing in university is theoretical nonsense. There are very few rich professors.
16. The more someone is on TV, the less likely his or her predictions are to come true. (U.C. Berkeley psychologist Phil Tetlock has data on this).
17. Trust no one who is on CNBC more than twice a week.
18. The majority of market news is not only useless, but also harmful to your financial health.
19. Professional investors have better information and faster computers than you do. You will never beat them short-term trading. Don’t even try.
20. The decline of trading costs is one of the worst things to happen to investors, as it made frequent trading possible. High transaction costs used to cause people to think hard before they acted.
21. Most IPOs will burn you. People with more information than you, want to sell. Think about that.
22. The phrase “double-dip recession” was mentioned 10.8 million times in 2010 and 2011, according to Google. It never came. There were virtually no mentions of “financial collapse” in 2006 and 2007. It did come.
23. The best investors in the world have more of an edge in psychology than in finance.
24. What markets do day to day is overwhelmingly driven by random chance. Ascribing explanations to short-term moves is like trying to explain lottery numbers.
25. If you have credit card debt and are thinking about investing in anything, stop. You will never beat 30% annual interest.
26. A large portion of share buybacks are just offsetting shares issued to management as compensation. Managers still tout the buybacks as “returning money to shareholders.”
27. Twelve years ago General Motors was on top of the world and Apple was laughed at. A similar shift will occur over the next decade, but no one knows to which companies.
28. Most would be better off if they stopped obsessing about Congress, the Federal Reserve, and the president and focused on their own financial mismanagement.
29. For many, a house is a large liability masquerading as a safe asset.
30. The most boring companies — toothpaste, food, bolts — can make some of the best long-term investments. The most innovative, some of the worst.