5 Value Investing Quotes that Will Make You Think Differently

When I was an outsider to the world of investing, I believed that investing in the share market would be like Harry Potter's magic wand. This was because every now and then, I came across stories of quick and sudden gains in the stock market.

You just swish the wand and boom! You're rolling in money.

But when I got a peek into the share markets, I realised there was no magic. It's all logic. Just like any other business, you have to put in effort or money to earn from the share markets.

Either do the detailed analysis or pay someone who can do it for you. Just like any other business, even in share markets, knowledge comes from experience.

And we know that in life the advice that comes with experience matters the most.

With that in mind, we bring to you, the 5 investing quotes from seasoned investors that will change your thinking for good.

These value investing quotes are still relevant today. Let's get started...

#1 We don't have to be smarter than the rest. We have to be more disciplined than the rest. - Warren Buffett

Known as the "Oracle of Omaha", Warren Buffett has given lots of important advice to investors. In this one, he highlights the importance of consistency over smartness.

Whenever we talk about investing in the share market, we subconsciously want to be the smartest. We can invest in a stock that is best in all aspects and is undiscovered and earn money that no one can.

But we forget that if no one can, it's because that kind of earning does not exist! We all want windfall gains, but we ignore the power of small regular gains.

While running behind this mirage of being the smartest, we often put ourselves at high risk.

A stock that is well known and earns small but consistent gains is much better than a stock that is not known and might fetch huge profits.

This value investing quote has a lot to do with discipline. Many times, you'll be given the chance to take a different path (than what you would follow). It's at times like these that this quote would come in handy.

Be disciplined and follow a sound investing process no matter what may come. You will likely do well.

Warren Buffett, the CEO of Berkshire Hathaway, is one of the world's most successful investors. He has been featured in the list of the world's richest men many times.

#2 Being a value investor means looking at the downside before looking at the upside - Li Lu

This quote is one of the most relevant quotes in current times.

In 2022, the markets have been volatile. They have been bleeding red. People have been crying out loud about how their good morning is no longer good because every morning, they wake up to their portfolio at new lows.

But at the same time value investors have been rejoicing.

They have been rejoicing because they had looked at the downside - the risk of share price falling, before looking at the gains - gains from the shares.

"What's the worst that can happen?" and if the worst happens, "Can I bear the worst?"

Before investing in any stock, if you answer these two questions, you will never panic when the tables turn. One should expect the best but be prepared for the worst.

Li Lu is a value investor, businessman, and philanthropist. He is the founder and chairman of Himalaya Capital. Himalaya Capital is a multi-billion-dollar investment company that makes long-term investments in Asia and the US.

#3 It is not how much money you make, but how much money you keep, how hard it works for you, and how many generations you can keep it for. - Robert Kiyosaki

We have heard stories of how someone used to be extremely rich back in their time but their future generations are now leading a life of hardships.

This happens when people have the business acumen to earn money but not the foresight to keep the money growing.

Having a good source of income is not enough. In investing, it is equally important to figure out how this source will not go dry and to have backups in case the source dies.

If you earn only for yourself, your job is only half done. You should be able to generate wealth for generations to come.

Finding stocks that will generate wealth for you and also your grandsons is the key to successful investing. This is easier said than done but not impossible.

Robert Kiyosaki is a successful businessman and New York Times, best-selling author. He is the author of the famous book Rich Dad Poor Dad - often called the #1 book on personal finance. He is the founder of Rich Global LLC and Rich Dad.

#4 Know what you own and why you own it. - Peter Lynch

One basic mistake an average investor makes while investing in the share market is that the investor does not study the company.

We have a habit of tracking the share price and not tracking how the company has performed over the years. This may lead to occasional luck-by-chance gains, but this is not investing.

When you buy a share, you must have a complete idea of the company's business. You should have an insight into the future that the company envisions for itself. This is called investing.

Buying a share is equal to becoming an owner of the business. An owner must be aware of what he/she owns.

Another aspect is knowing why you own the business. Do you trust the business to do well? Do you trust the company will have the same or better growth in the future?

An investor must have answers to all these questions to be successful.

Peter Lynch is one of the most inspiring and successful investors of all time. He was the manager of Magellan Funds at Fidelity Investments from 1977 to 1990. In these 13 years, he earned a great deal from the firm and retired at the age of 46!

#5 The individual investor should act consistently as an investor and not as a speculator. - Ben Graham

What better way to end this with a value investing quote by the father of value investing himself!

We invest money in financial markets with an expectation of profit. To gamble means to play games of chance with money.

A speculator will buy a stock because he believes the stock price will rise. But an investor expects that the company will grow in future, the company will make profits and he will earn from the company too.

Investor has reasons to buy what he brought. He does not just hope that prices will rise.

Speculating is placing a bet on the prices. Investing is trusting the management and the business of the company. An investor should at all times believe that his investment is worth more money than what he has invested.

Now we all know this but the problem is that we forget. One drastic movement in shares and most of the investors turn into speculators.

Hence, an investor has to make pain staking efforts to be an investor consistently.

The five lessons at a glance...

1. Consistency over perfection.
2. Protect downside and upside will take care of itself.
3. Long term wealth creation over short term profit-making.
4. Pay attention to the fundamentals, not prices.
5. Investing, not speculating!

If any person wishes to earn through share markets over a long period, he should keep these five lessons in mind.

Make a detailed study and share market gains will automatically follow. Of course, studying a company, management, and its future is tough and tedious.

But good things don't come easy and they take time, right?

To know more about investing stay tuned to Equitymaster.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...