10 Quotes That Shaped My Investment Philosophy


We all love to use quotations in our arguments. It’s both an appeal to higher authority as well as social proof (Hey! I’m not the only one who believes this stuff).

I find it useful occasionally to go back to first principles and reconsider the sources that have influenced my thinking. Along those lines, here are in chronological order, the thinkers who have helped shape how I view the world view, including how I philosophically think about the economy, markets, and investing.

None of these will be surprising to regular readers; perhaps the cumulative impact of all 10 might be revealing.


10 Quotes That Shaped My Investment Philosophy

1. “I write to discover what I think. (After all, the bars aren’t open that early.)”  -Daniel J. Boorstin

I began writing early in my career and found it tremendously useful. It helps organize your thoughts as it creates a record of what you believed at a specific time; it also invites comments and criticisms from others who have (hopefully) thought through similar issues.

Boorstin was the Librarian of the United States Congress, and understood the power of ideas and especially the written word. It’s a crucial aspect of my belief system.

2. “Ninety percent of everything is crapTed Sturgeon

Weary of defending of science fiction against attacks of people who used the worst examples of the field for ammunition, Sturgeon pointed out that most fields of human endeavor are filled with garbage. Its not just Sci Fi, ninety percent of everything is crud.

In the United States, Between 500,000 to 1 million new books are published annually via traditional publishers and another 2 million plus get self-published. Sturgeon’s law suggest 300,00 of them are not crap – and that number seems generous.

Now run the same exercise for Mutual funds, ETFs, Private Equity, Hedge Funds, Venture Capital, etc. Statistically speaking, the vast majority of new products won’t be worth your time or money. Even most publicly traded stocks are filler, with market returns being driven by a tiny percentage of equities.

3. “To make better, more informed decisions about the future, we advise people to have “strong opinions, which are weakly held.” -Bob Johansen at the Palo Alto Institute for the Future

Investing is a probability exercise where we have to make decisions using imperfect information about an unknowable future.

Hence, whatever your views are about the economy, markets, your portfolio, etc., you must be ready to discard them as you amass evidence that they are wrong.

Strong opinions weakly held means you cut your losses quickly, you reverse your priors when necessary, and you do not marry any holding or belief system – ever.

4. “All models are wrong but some are useful.” -George E. P. Box

We don’t live in objective reality; in truth, we function in a model of our own construction. Our brains generate mental outlines, continually filling in missing information to create a 360-degree world we operate within. This useful evolutionary trait has allowed the human species to thrive in a world that is hostile to us soft, chewy creatures lacking claws, fangs, or armor.

We model the economy, we model markets, we create Monte Carlo simulations of how our portfolios will perform. We rarely deal with objective reality, instead interacting will all of our artificial constructs.

We become disappointed when models don’t behave the way reality does. We get lost in the usefulness of models, leading us to forget their wrongness.

5. “Nobody knows anything” -William Goldman

I’ve discussed the infamous screenwriter’s quote repeatedly over the years (see this and this) so I won’t spend too much time here other than to remind you that Hollywood passed on Star Wars, on Raiders of the Lost Ark, on John Wick and too many others to mention.

Whenever you hear someone confidently explaining what’s going to happen in the future, it’s worth your time to recall the wisdom of Goldman.

Related quote: Paul Graham’s “When experts are wrong, it’s often because they’re experts on an earlier version of the world.”

6. “The whole problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts.” -Bertrand Russell

This is the Dunning Kruger effect writ large. Those who are the least knowledgeable are often the most cocksure about their own skills, abilities, and beliefs. Think back to the meme stock traders during the pandemic, or crypto before that or dotcoms before that.

It takes some level of expertise to understand all of the risks and challenges of any endeavor. No wonder wise people harbor doubts – they can better see the entirety of a challenge.

Related quote: “Ignorance more frequently begets confidence than does knowledge.”   -Charles Darwin, Descent of Man published in 1871:

7. “I have approximate answers, and possible beliefs, and different degrees of uncertainty about different things. But I am not absolutely sure of anything and there are many things I don’t know anything about. I don’t feel frightened not knowing things.” -Professor Richard Feynman

One of the greatest thinkers in physics was also one of the wisest thinkers about thinking. Knowing what you know is nice, but knowing the things you do not know means you have fewer blindspots, and are less likely to be surprised by unexpected events.

It’s a recognition that much of what we consider at any given time should be thought of in terms of probabilities, not binary yes or no outcomes.

8. “Being right may be a necessary condition for investment success, but it won’t be sufficient. You must be more right than others…which by definition means your thinking has to be different.” -Howard Marks, Oaktree Capital

If I told you what the economic releases for GDP and NFP were for the next 12 months, do you think it would help your trading?

Jane Street Trading managed to figure out state-by-state results in the 2016 presidential election minutes before the major cable channels did. This allowed them to trade ahead of everybody, making $300 million overnight shorting equity futures. But they failed to fully think through the results of the election – Tax cuts and Stimulus spending! – and when the markets reversed, their giant win turned into the firm’s biggest ever loss.

Second-level thinking requires going to the first step, beyond what is obvious. Merely figuring out what happens is not enough; markets are a hall of mirrors, and each new piece of information sets off a cascade of will reflexivity, actions and reactions that are nearly impossible to predict.

Those who can stand to make a fortune.

9. “Never attempt to teach a pig to sing; it wastes your time and annoys the pig.” -Robert A. Heinlein, The Notebooks of Lazarus Long

I have been writing in public for 25 years. Pushback to posts, columns and tweets are often revealing of as person’s views for better or worse.

I can gently correct them of factual errors, but I am never going to change their fundamental belief system. They simply have invested too much time and energy in their worldview, and it would be way too expensive for them to reverse that.

David McRaney and I discussed the challenges of persuading people to change their beliefs or opinions, especially about issues where their self-identity is involved.

Someone is wrong on the internet  -xkcd

Another good Heinlein quote: “Man is not a rational animal; he is a rationalizing animal.

10. “Memento Mori” (Latin for ‘remember that you will die’)

At the end of the day, we all must shuffle off this mortal coil to our infinite repose.

In “Meditations” the Stoic Marcus Aurelius told his reader to “consider how ephemeral and mean all mortal things are.” He explained how a triumphant Roman general would have a companion stand behind him during his victory procession and remind him from time to time of his own mortality or prompt him to “look behind.”

Whatever we are doing, it is at best temporary. Try not to lose sight of the bigger picture as you work your way through the detritus and minutia.


There are many variations and offshoots of all of these, but I wanted to stay with the ones that really stood out. These created that Aha! moment for me, and stood the test of time.




Ritholtz: Why I Write (May 4, 2015)

Strong Opinions, Weakly Held (July 24, 2006)

Nobody Knows Nuthin’ (May 5, 2016)

What Models Don’t Know (May 6, 2020)

Nobody Knows Anything


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