Some wisdom from Buffett and Lynch

The Ticker

October 02, 1998|By Julius Westheimer

What is behind the success of some of the well known investors?

"We don't predict the stock market," Warren Buffett says. "You pay a very high price for a cheery consensus. I'd rather buy stocks when no one wants them than when everyone wants them."

"There's a strong correlation between stock performance and what companies earn. In the past six years, corporate profits doubled and the market was up 2 1/2 fold." (Peter Lynch, former manager, Fidelity Magellan Fund)

According to Forbes magazine, investors should: "Buy, don't sell. You can't compound wealth paying nearly half your winnings in taxes. Build wealth by holding winners, avoiding taxes and compounding your profits full time."

"No one knows where stocks will go, but smart investors don't 'time' their buys and sells. Stay invested with a disciplined, regular investing program, regardless of what bulls and bears of tomorrow bring." (National Association of Investment Clubs newsletter)

"Never invest in something you don't understand, even if your broker or friend understands it. They won't cover your losses. Better to leave money in T-bills than discover there were risks you couldn't see at the outset." (Harry Browne's Special Report)

"Bear markets are as loaded with opportunity as bull markets are." (James Grant, financial publisher.)

"If most investors bail out of a mutual fund you own, sell your shares, too. Heavy outflows -- which you see in quarterly statements -- are dangerous as fund managers sell their best holdings to meet redemptions." (No-Load Mutual Fund Investor)

Pub Date: 10/02/98

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