In the end, alchemy, whether it is metallurgical or financial, fails. A base business can not be transformed into a golden business by tricks of accounting or capital structure. The man claiming to be a financial alchemist may become rich. But gullible investors rather than business achievements will usually be the source of his wealth.
You don't need to be an expert in order to achieve satisfactory investment returns. But if you aren't, you must recognize your limitations and follow a course certain to work reasonably well. Keep things simple and don't swing for the fences.
It's easy to identify many investment managers with great recent records. But past results, though important, do not suffice when prospective performance is being judged. How the record has been achieved is crucial.
I think the oversight is great, and I think that oversight ought to be devoted almost entirely to the question is this being done at market you know. In other words, you want to make sure that the government isn't investing foolishly. But you don't want to care about which congressional districts it goes to or whether banks get favored over.
Mr. Market is kind of a drunken psycho. Some days he gets very enthused, some days he gets very depressed. And when he get really enthused you sell to him, and if he gets depressed, you buy from him. There's no moral taint attached to that.
The problem with commodities is that you are betting on what someone else would pay for them in six months. The commodity itself isn't going to do anything for you....it is an entirely different game to buy a lump of something and hope that somebody else pays you more for that lump two years from now than it is to buy something that you expect to produce income for you over time.
We set no volume goals in our insurance business generally-and certainly not in reinsurance-as virtually any volume can be achieved if profitability standards are ignored.
The greatest investment a young person can make is in their own education, in their own mind. Because money comes and goes. Relationships come and go. But what you learn once stays with you forever.
The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.