1. TANSTAAFL: There ain’t no such thing as a free lunch.
2. Incentives matter; incentives affect behavior.
3. Economic thinking is thinking on the margin.
4. The only way to create wealth is to move resources from a lower-valued to a higher-valued use. Corollary: Both sides gain from exchange.
5. Information is valuable and costly, and most information that’s valuable is inherently decentralized.
6. Every action has unintended consequences; you can never do only one thing.
7. The value of a good or a service is subjective.
8. Creating jobs is not the same as creating wealth.
9. The only way to increase a nation’s real income is to increase its real output.
10. Competition is a hardy weed, not a delicate flower.
“Prices are going to get worse because Mr. Bernanke and the people in Washington are spending gigantic amounts of money which we don’t have, and someobody has to pay for this. There’s no free lunch.”
Interesting set of rules from legendary investor John Templeton:
1. Invest for maximum total real return
2. Invest — Don’t trade or speculate
3. Remain flexible and open minded about types of investment
4. Buy Low
5. When buying stocks, search for bargains among quality stocks.
6. Buy value, not market trends or the economic outlook
7. Diversify. In stocks and bonds, as in much else, there is safety in numbers
8. Do your homework or hire wise experts to help you
9. Aggressively monitor your investments
10. Don’t Panic
11. Learn from your mistakes
12. Begin with a Prayer
13. Outperforming the market is a difficult task
14. An investor who has all the answers doesn’t even understand all the questions
15. There’s no free lunch
16. Do not be fearful or negative too often
Complete explanation after the jump (more…)
1. You always have to have cash, especially when no one else has it. (John Burbank of Passport Capital has said the same: “Cash is most valuable when others don’t have it.”)
2. No free lunch- it’s not free, or it’s not lunch.
3. You can’t change people! You can change yourself, but not others.
4. You only see reality under extreme stress- you want to get to know someone, you need to see them under extreme stress.
5. Volatility is not risk!
6. Always assume you will have bad luck.
7. Few variables to win. Once you have to think about more than 3 variables, your odds of winning are low.
“If you want to be good at something, practice. Practice deliberately, and do so for many years.” Mike Bellafiore, One Good Trade
If the activities that lead to greatness were easy and fun, then everyone would do them and they would not distinguish the best from the rest.” Geoff Colvin, Talent Is Overrated
“He that is good for making excuses is seldom good for anything else.” Benjamin Franklin
“Commitment, perseverance, and discipline are the characteristics that move people beyond desire to action, that differentiate mediocrity from greatness, and that separate greatness from superstardom.” Doug Hirschhorn, 8 Ways to Great.
“I always felt that my greatest asset was not my physical ability, it was my mental ability.” Bruce Jenner
“Those who are motivated by the love of the game attain a deeper sense of satisfaction from their work than those who are driven solely by the pursuit of wealth.” Brian Shannon, Technical Analysis Using Multiple Time Frames
“A free lunch is only found in mousetraps. “ John Capuzzi (more…)