naved-abdali Quotes About investing

“The government wants to keep the capital markets healthy and thriving. They will do whatever in their power to avoid or reverse a recession.”

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Author:Naved Abdali

“There is no guarantee that all investments will result in profits, but a carefully chosen portfolio of assets is highly likely to grow over time.”

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Author:Naved Abdali

“A modest rate-of-return can accumulate a fortune over time. You don’t need to beat the market, do over-leveraging, or pick the best stock to be rich. You just need to earn a decent rate-of-return and let your money compound overtime.”

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Author:Naved Abdali

“The most important thing is to invest. The second most important thing is to buy well.”

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Author:Naved Abdali

“It is foolish to believe that cash in the form of bills or your bank account is not exposed to any risk. Sure, it is.”

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Author:Naved Abdali

“The total return of a property that can be rented can easily beat any other investment type. The combined rate of return of capital appreciation and rental income is substantially better.”

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Author:Naved Abdali

“Short-term price action means nothing and should mean nothing to you. Keep your focus on long-term business growth.”

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Author:Naved Abdali

“To accumulate any wealth, you must invest at a growth rate higher than inflation.”

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Author:Naved Abdali

“You must start investing as early as possible. Yesterday was better than today, and today is better than tomorrow. Don’t wait for a significant market drop.”

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Author:Naved Abdali

“Market prices only matter at two points of time in the investment life cycle. First when you buy and second when you sell. In between these two points, value matters.”

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Author:Naved Abdali

“The number one reason people lose money in investing is because they buy assets without giving any thought whatsoever to the fair value.”

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Author:Naved Abdali

“If investors do not know or never attempt to know the fair value, they can pay any price. More often, the price they pay is far greater than the actual value.”

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Author:Naved Abdali

“Watching every tick up and every tick down is just wasting your valuable time. Do yourself a favor, and pick up a book or two about investing each month.”

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Author:Naved Abdali

“It is challenging for a human brain to distinguish between noises and threats if a considerable value is at stake.”

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Author:Naved Abdali

“Market quotes change every second, but business evolves steadily. You have ample time to evaluate a business to buy or not to buy. There is no rush.”

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Author:Naved Abdali

“If you have some working knowledge of business and accounting and have a lot of patience to ride out market ups and downs, you can be a stock picker. You just need to understand that stocks are proportionate ownership of earning businesses.”

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Author:Naved Abdali

“I believe when using leverage, the following four conditions must be met. 1. Leverage must be in the general direction of a secular trend. 2. Leverage should never expire. 3. Leveraged positions should not be subject to forced sell. 4. The maximum possible loss should not be more than the invested capital.”

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Author:Naved Abdali

“Economic conditions may differ from period to period, but human psychology is embedded among us and will not change.”

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Author:Naved Abdali

“A considerable part of our emotional realities is often made up by our minds.”

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Author:Naved Abdali

“Investors need to keep their emotions in check for a successful investment career. It is the most important requirement. It’s even more critical than having access to capital and markets.”

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Author:Naved Abdali

“Traders and investors are humans, full of emotions, behavior biases, and good and bad past experiences. We don’t have much control over psychological shortcomings, and we routinely make decisions contaminated with our emotions and biases.”

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Author:Naved Abdali

“This tendency of overconfidence and poor outcomes is not confined to only retail investors. Institutional investors suffer from overconfidence equally if not more, and their investment results are not superior either.”

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Author:Naved Abdali

“All of us need to invest our capital to achieve financial freedom, but most of us are not equipped with the soul and skills to have concentrated portfolios.”

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Author:Naved Abdali

“It may take some time, but capital will eventually flow to the most logical place.”

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Author:Naved Abdali

“Mandatory allocation of capital between bonds and stocks by mutual funds creates tremendous short-term opportunities for investors.”

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Author:Naved Abdali

“All common investments have a great feature; the maximum amount you can lose is your capital.”

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Author:Naved Abdali

“Generally, a cheap stock is cheap for a reason. If you don’t know the reason, you will be better off investing your capital elsewhere.”

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Author:Naved Abdali

“The actual risk is the permanent loss of capital or, to a lesser extent, a sub-par return. Temporary volatility in market price is not a real risk.”

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Author:Naved Abdali

“All capital investments inherently suffer the risk of permanent capital loss. As an investor, it is your job to differentiate between market volatility and a permanent capital loss. You can only achieve this when you fundamentally understand why you bought the asset in the first place.”

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Author:Naved Abdali

“When you invest in stocks or any other asset, your primary risk is the permanent loss of capital. Your secondary risk is a sub-par return, and that’s it. You don’t have any other risk.”

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Author:Naved Abdali

“Market participants are humans, and so are their behaviors.”

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Author:Naved Abdali

“Humans’ reactions are contaminated with their cognitive biases, greed, fear, and survival instinct. However, capital market success requires precisely the opposite behavior of what your intuition is suggesting.”

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Author:Naved Abdali

“The greatest fear of a professional investor, who manages money for a living, is capital withdrawals at the wrong time.”

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Author:Naved Abdali

“Money managers tend to make irrational decisions just to protect their calendar year performances, even if they believe that decision is not in the best interest of investors.”

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Author:Naved Abdali

“Individual investors have significant advantages over professional money managers. Retail investors, like you and I, have nobody to report. We have no benchmark to beat and have no fear of capital flight. There are no quarter and year ends, and performance is not linked to calendars.”

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Author:Naved Abdali

“Capital withdrawals by investors can torpedo investment strategies of money managers at the worst possible time.”

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Author:Naved Abdali

“Gold, paintings, or bitcoin are all examples of buying a bigger-idiot type of asset. You can be lucky and find a bigger idiot most of the time, but if you consistently play the same game, once in a while you will be the biggest idiot. You will find yourself holding the bag all the way down to market bottoms.”

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Author:Naved Abdali

“It is always better to avoid hyped stocks and desire to double your money in no time.”

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Author:Naved Abdali

“In a rapidly rising market, the stretch of prices between two points of time is amplified, then so is the general public’s behavior towards prices.”

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Author:Naved Abdali

“Analyzing prices is not wrong. However, picking inflated prices as your only source of information is terrible.”

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Author:Naved Abdali

“More often than not, the most significant asset may not be on the balance sheet.”

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Author:Naved Abdali

“Prices are easy to understand, and it is easy to isolate or pick assets based on prices. Understanding the businesses and analyzing the risk is complex.”

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Author:Naved Abdali

“Trading is buying and selling to exploit a change in the price. Investing is acquiring assets for economic reasons.”

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Author:Naved Abdali

“Most active investors fail to realize that they are part of the crowd themselves. They are trying to beat the crowd while being the crowd.”

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Author:Naved Abdali

“Leverage has the potential to turn a reasonably good investment into disastrous gambling.”

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Author:Naved Abdali

“Be realistic about potential market returns, and be aware of possible risks.”

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Author:Naved Abdali

“Predicting a downturn is not critical. The important thing is what you do when a significant downturn happens.”

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Author:Naved Abdali

“When you buy a stock, you buy a piece of business, not a quote from a broker. As long as the company is doing good, your investment is safe.”

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Author:Naved Abdali

“If the prices were the motivation for buying, all future behavior and decisions would be based on price action.”

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Author:Naved Abdali

“Somehow, we believe that we have a better chance of winning a game of probabilities, totally disregarding that everybody who is playing the game has the same possibility of winning.”

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Author:Naved Abdali

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