The Unwritten Laws of Finance & Investment

The Unwritten Laws of Finance and Investment, by Robert Cole.

I believe I have already mentioned at some point in the blog the ritual I have almost every time I get into an airport of going to one of the book shops to check whether I can find something to take with me.

I found “The Unwritten Laws of Finance & Investment”, by Robert Cole, at Frankfurt’s airport some months ago during a scale from Amsterdam to Toulouse.

The book is a collection of investment and finance maxims, advice, quotations, etc. It can be read in one shot (159 light pages).

If you are to read this book probably nothing of what you may find in it will be completely new to you, but the compilation and the witty style in which the “laws” are written make it an entertaining read and serve as repository where to find well established ideas.

Let me finish by quoting some passages from the laws that I enjoyed the most:

• “I don’t want a lot of good investments; I want a few outstanding ones”, Philip Fisher.
• It is impossible for investors to get their timing precisely right always. [I will come back to this in the future].
• “In this business, if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten”, Peter Lynch.
• Before you go in, look for the way out. – This one is beautifully explained with a story from Winnie-the-Pooh. [I will come back to this in the future].
• “Bull markets are born on pessimism, grow on scepticism, mature on optimism and die one euphoria”, Sir John Templeton. – This one reminds us to that of Warren Buffett “Be fearful when others are greedy and greedy when others are fearful”.
• “There are huge mathematical advantages to doing nothing”, Warren Buffett (on compounding interest).
• “The rich rules over the poor, and the borrower becomes the lender’s slave”, the Book of Proverbs 22:7, The Bible.
• “The practice of contracting debt will almost infallibly be abused in every government. It would scarcely be more imprudent to give a prodigal son a credit in every banker’s shop in London, than to empower a statesman to draw bills, in this manner, upon posterity”, David Hume.
• “The four most expensive words in English language are ‘This time is different'”, Sir John Templeton. [I will come to this in the future].
• “Investment is most intelligent when it is most businesslike”, Warren Buffett.