Sunday, March 2, 2014

The Top 17 Investing Quotes of All Time

Investopedia had an article about the Top 17 Investing Quotes of All Time here: Let us examine them and see how they apply to MTGO Finance!
  1. "An investment in knowledge pays the best interest." - Benjamin Franklin Knowledge is everything. Check MTGFinance on Reddit, #mtgfinance on Twitter, listen to Brainstorm Brewery, read the finance articles. Keep yourself educated! Actually you will have to read even more as you have to know what is happening in the different Magic formats to know which cards will move.
2. "Bottoms in the investment world don't end with four-year lows; they end with 10- or 15-year lows." - Jim Rogers Magic Online lows last a month at most, because we have no memory. Look at what happened when tournaments went away. Prices were back to normal in a month. This obviously does not apply to Magic Online.
  3. "I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful." - Warren Buffett We already talked about this in the Warren Buffet article here:
  4. "The stock market is filled with individuals who know the price of everything, but the value of nothing." - Phillip Fisher Research is much more than just listening to popular opinion. Well, this pretty much just iterates what Benjamin Franklin said in #1.
  5. "In investing, what is comfortable is rarely profitable." - Robert Arnott I could not rephrase this better than investopedia said it: "At times, you will have to step out of your comfort zone to realize significant gains. Know the boundaries of your comfort zone and practice stepping out of it in small doses. As much as you need to know the market, you need to know yourself too. Can you handle staying in when everyone else is jumping ship? Or getting out during the biggest rally of the century? There's no room for pride in this kind of self-analysis. The best investment strategy can turn into the worst if you don't have the stomach to see it through."
  6. "How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case." - Robert G. Allen This is a very important point for me personally. I don't speculate in Standard cards that I think will go up 20% because some deck just became popular. I invest in stuff that I think will go up 200% within 12 months, like buying Modern staples during the off-season. I talk more about these principles in this video:
  7. "Invest in yourself. Your career is the engine of your wealth." - Paul Clitheroe Very few MTGO Speculators do this as a full time career. But if you do, you better invest. How do you invest then? First you have to educate yourself, but we have already talked about this. I would invest in myself by taking care of myself, by acknowledging that I am sitting in front of a computer all day and take appropriate measures to stay healthy. I would go to the gym, eat healthy etc
  8. "Every once in a while, the market does something so stupid it takes your breath away." - Jim Cramer Yes, this happens on Magic Online. All the time! Can you think of an example? Or twenty? :)
  9. "The individual investor should act consistently as an investor and not as a speculator." - Ben Graham To me, this means that we should invest in long-term trends (like buying Theros cards in june and selling them during the height of Standard PTQ Season in February 2015. So less speculation and more long term trading.
  10. "It's not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for." - Robert Kiyosaki Mr Kiyosaki is certainly right here, but it is hard to apply to MTGO Finance. Even if Magic has been around for 20 years I doubt we will have our grandchildren running our bots in 60 years.
  11. "Know what you own, and know why you own it." - Peter Lynch Do your homework before making a decision. And remember to sell! Its not about who owns the most cards - its about who earns the most money. Selling is as important as buying.
  12. "Financial peace isn't the acquisition of stuff. It's learning to live on less than you make, so you can give money back and have money to invest. You can't win until you do this." - Dave Ramsey Every nickle counts. Speculating is a game of small edges and you need to take them all. Keep your playing to a minimum and remember that it is a leak and costs you tickets all the time. Try to avoid playing limited, unless it is the 4-man New Player Tournaments (that are decent EV).
13. "Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas." - Paul Samuelson If you think MTGO Finance is about predicting what will score on the Pro Tour, you will never earn any significant income. Think about the greater trends. Which cards will be in demand during the summer? Get them now!
  14. "I would not pre-pay. I would invest instead and let the investments cover it." - Dave Ramsey This one is simple to interpret. Don't borrow money to spend on MTGO cards. That would be insane. 
 15. "The four most dangerous words in investing are: 'this time it's different.'" - Sir John Templeton It is never different. Unless its about Mutavault that actually broke records that Thragtusk had just set. Having said that, it is very seldom different. How high can a Mythic spike during its Standard life? Another popular Mythic will not probably ever be more expensive than last year's popular Mythic? Look at history of card prices and learn from it.
16. "Wide diversification is only required when investors do not understand what they are doing." - Warren Buffett Investopedia says it well: "In the beginning, diversification is relevant. Once you've gotten your feet wet and have confidence in your investments, you can adjust your portfolio accordingly and make bigger bets." I still diversify. I probably diversify too much.
17. "You get recessions, you have stock market declines. If you don't understand that's going to happen, then you're not ready, you won't do well in the markets." - Peter Lynch Make sure you have the tickets when card prices drop, because that is the time to invest! I find these exercises very useful. Going through a list like this makes me think about what I am actually doing instead of just doing it. MTGO Finance is hard and requires a lot of thought. Be sure to spend some time thinking about it every day. Don't let it become routine. If you do, your edge will be gone.

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