The current economic performance, with its combination of strong growth and low inflation, is as impressive as any I have witnessed in my near half-century of daily observation of the American economy.
Alan Greenspan in Testimony Before the Joint Economic Committee (6/10/98) The problem is that investing is a zero-sum game. In other words, you have winners in the market -- and losers. Then, on the minus side, you also have costs and fees. . . when you add up commissions, spreads, the impact from buying or selling more and throw in this trend or opportunity cost, you find that the true transaction cost in trading stocks often is measured in whole percentage points, not basis points. . . Everyone has forgotten that after the horrible experience of '29, it took you a mere 18 years to get back to even. This attitude that if you buy stocks for the long run there is no risk is so laughable.
Theodore R. Aronson in By the Numbers $$ from Barron's (6/15/98) People seem to consistently overestimate the value of past growth rates in predicting future growth rates. So companies that have grown rapidly over a 10-year period will be given very high price-earnings ratios and the expectation that growth will continue. But actually, growth is very hard to predict based on the past. People also place too much comfort in investing in companies that are well run and highly profitable, and don't pay enough attention to companies that are in need of improvement, but at the current market prices are bargains. Even if money managers are aware of some of these anomalies, they tend to be timid in taking positions to exploit them because they're exposed to holding names that could end up real losers.
Robert Vishny in "It's how human nature affects the behavior of stock prices" from InvestmentNews (6/8/98)A budget with your money is just like going on a diet with your weight . . . Its not about making more, its about keeping more of what you already make.
Suze Orman (author of The 9 steps to Financial Freedom) in "The 9 steps to Financial Freedom With Suze Orman" on PBS (6/13/98)
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