Barry Ritholtz quotes:

Google's founders have had a good eye for imagining what technologies will be significant in the near future. No one asked Google to develop self-driving cars, but it helped them with street views for Google Maps.

Owning a variety of asset classes means that some part of your portfolio will be doing well when the cyclical turmoil arises. A broadly diversified portfolio includes large capitalization stocks, small cap, emerging markets, fixed income, real estate and commodities.

A number of bloggers in economics and the financial sector have risen to prominence through the sheer strength of their work. Note it was not their family connections nor ties to Ivy League schools or elite banks, but rather the strength of their research, analysis and writing.

Little white lies are told by humans all the time. Indeed, lying is often how we get through each day in a happy little bubble. We spend time and energy rationalizing our own behaviors, beliefs and decision-making processes.

I credit Google for having the foresight to identify threats to its main business of selling advertising against search results. The potential loss of market share in the mobile space led them to the Android acquisition.

Shopmas now begins on Thanksgiving Day. Apparently, escaping the families you cannot stand to spend another minute with on Thanksgiving Day to go buy them gifts is how some Americans show their affection for one another. Weird.

When it comes to investing, you are your own worst enemy.

Mutual fund managers want your money in their funds. They get paid based on assets under management.

The electronics industry expanded rapidly and the seeds for the semiconductor and software revolution were planted. The postwar period also saw the suburbanization of America, the rise of the homeowner, the build-out of the interstate highway system, and the rise of automobile culture. Credit availability expanded dramatically.

Despite all the media coverage, glitz and glam of hedge funds, they have not done well for their investors. They have high - some say excessively high - fees; their short- and long-term performance has been poor.

It is important for investors to understand what they do and don't know. Learn to recognize that you cannot possibly know what is going to happen in the future, and any investment plan that is dependent on accurately forecasting where markets will be next year is doomed to failure.

Commissions add up, taxes are a big drag, margin ain't cheap. A good accountant costs money as well. The math on this one is obvious, yet investors often fail to recognize it: Keep your costs low and your turnover lower, and you will win in the end.

Secular cycles are the long periods - as long as decades - that come to define each market era. These cycles alternate between long-term bull and bear markets.

A well-designed 401(k) plan is an enormous competitive edge when recruiting and retaining employees.

Amongst the financial Twitterati, the term 'muppets' has come to describe any client used and abused by some financial predator. I've adopted the term to describe portfolios that have been assembled for purposes other than serving the clients' best interests.

Any Wall Street advertising that does not go into the boring details of methodology is most likely to be pushing past performance.

Investors tend to discover 'hot' mutual fund managers just after a successful run and just before the inescapable force of mean reversion is about to kick in.

Rather than engage in the sort of selective retention that so many investors tend to do and pretend mistakes never happened, I prefer to 'own' them. This allows me to learn from them and, with any luck, avoid making the same errors again.

Active management leads to lots of poor investor behavior. It sends people chasing after whoever has the hot hand at the moment.

We love a tale of heroes and villains and conflicts requiring a neat resolution.

Any investment bought via credit always runs the risk of margin calls and, eventually, liquidation.

If you think too-big-to-fail banks are not worthy of investment because of their impossible-to-read balance sheets, well then, don't buy them.

Outcome is simply the final score: Who won the game; what numbers came up in a roll of the dice; how high did a stock go. Outcome is the result, regardless of the method used to achieve it. It is not controllable.

What you pay for an investment is the single biggest determinant for how successful that investment will be. When equity prices are high, your returns will be lower. When they are cheap, your returns will be higher.

The simple reality of life is that everyone is wrong on a regular basis. By confronting these inevitable errors, you allow yourself to make corrections before it is too late.

Based on a lifetime of observations and a few decades in the markets, I understand that societies, beliefs and fashions all move in long arcs of time. We call these arcs several things: cycles, periods, eras.

With Twitter, you can build your own virtual trading floor and research department, populated by the smartest people on earth. Almost any subject or sector has you can think of, you can find a few people with an expertise in that area.

Content is king. When you are asking people to read you several times a day, you better have some fine content.

Truth be told, most financial television bores me. Two or more people discussing the latest economic trends or hot stocks is not especially entertaining.

We must recognize our own behavioral errors. To be blunt, you are not likely to become a cognitive Zen master anytime soon. But a little enlightenment could keep you from making some common investing errors.

Investing is about making probabilistic decisions with limited information about an unknowable future. The variables are well known, as are the possible outcomes.

It is in your DNA to love a good story. You know, neat tales with heroes and villains and conflicts to resolve. A good story pushes our buttons, is exciting and memorable.

The way we finance homes in this country is slow, filled with middlemen, who run a nonstandardized evaluation process. This makes financing a home cumbersome and difficult.

There is a shortage of doctors, and the American Medical Association is aiming to keep it that way.

To know whether stocks are cheap or pricey, we typically look at price-to-earnings ratio. Valuation is a tougher question than many folks realize.

People forget that although we can pinpoint the price, we can only guess at future earnings. The past isn't much help: It simply tells whether a market was pricey or cheap.

In social media, people cannot build big followings organically unless what they are putting out to the world has value.

If you are not making any mistakes, you are being excessively risk-averse. Investing involves risk, and that means you will occasionally be wrong. And although it is okay to be wrong, it is not okay to stay wrong.

Even when you are right, there are costs and taxes associated with being tactical. When you are wrong, there are opportunity costs.

Have a well-thought financial plan that is not dependent upon correctly guessing what will happen in the future.

Gains in corporate profits depend in large part on accelerating global economic growth.

As investors, we want to believe we are smart, insightful and uniquely talented - even though we often fail to do the heavy lifting, put in the long hours, and make the uncomfortable but necessary decisions to achieve success.

A hedge fund manager whose clients demand monthly performance reports has different needs than any individual investors with a 20-year time horizon. The needs of that long-term investor differ markedly from someone who is retiring in three years.

Often, investors will discover a manager after he's had a terrific run, usually when he lands on a magazine cover somewhere. Invariably, funds swell up with new investor money just before they revert to their long-term averages.

You, your employer and your plan's investment managers fail to follow even the most basic rules of investing. You overtrade, chase performance, do not think long term. All of you - All Of You - have done a horrible job managing your retirement plans.

Narrative drives most of economics. Everything seems to be part of a story, and how that story is told often leads to critical error.

History is replete with examples of tech firms that were marginalized by new companies and technologies.

When you buy anything with lots of leverage, it does not require a whole lot to go wrong to lose it all.

When it comes to investing, there is no such thing as a one-size-fits-all portfolio.

In New York, the former lack of real competition allowed taxis to extract excessive charges, regardless of the poor service.

Asset managers have different approaches, and I don't wish to suggest there is only one way to run money. There are many ways one can attempt to reduce risk, improve performance, lower drawdowns and reduce volatility.

History shows us that people are terrible about guessing what is going to happen - next week, next month, and especially next year.

How are the cabs in your city? In Manhattan, where I work, they are rather awful.

Never forget this simple truism: Forecasting is marketing, plain and simple.

Keynes vs Hayek? Friedman vs Krugman? Those are the wrong intellectual debates. Its you vs. Tony Hayward, BP CEO, You vs. Lloyd Blankfein, Goldman Sachs CEO. And you are losing ...

Rather than engage in the sort of selective retention that so many investors tend to do and pretend mistakes never happened, I prefer to own them. This allows me to learn from them and, with any luck, avoid making the same errors again.

Markets are frequently ahead of, and often out of sync with, the economy.

Yearly data put the rest of the noise into perspective. Most of the weekly or monthly random up-and-down movements get smoothed out. Ultimately, this is where long-term investors should be focused.

The market is going to love it. The market always seems to applaud major mergers, even though the vast majority of them don't work out and don't increase shareholder value.

Indeed, eventually, random outcomes all revert to the mean, meaning that streaks eventually end. Understanding this is a key part of intelligent and rational investing.

When markets are rallying, cash in the portfolio is a drag on performance, returning about zero.

For those of you who may be unaware, [Michael] Boskin is the economist/weasel/fraud who helped to officially distort the CPI, making it more or less worthless as a measure of inflation. The Boskin Commission... was an act of cowardice. Rather than man up and say fix this, its broken, we can't afford it....

Whenever you try to pick market tops and bottoms, you are making a prediction. Guessing what stock is going to outperform the market is forecasting, as is selling a stock for no apparent reason. Indeed, nearly all capital decisions made by most people are unconscious predictions.

Any time you speak to people about their posture, you learn about their most recent investment activity. When someone just bought stocks, they tend to be bullish; someone who just sold is bearish.

Here is a dirty little secret: Stock-picking is wildly overrated. Sure, it makes for great cocktail party chatter, and what is more fun than delving into a company's new products? But the truth is that individual stocks are riskier than broad indices.

The bottom line is this: Cash, in modest increments, has a role in any portfolio. But unless you are Warren Buffett, you should limit it to 2 or 3 percent.

You want less of the annoying nonsense that interferes with your portfolios and more of the significant data that allow you to become a less distracted, more purposeful investor.

People who work in specialized fields seem to have their own language. Practitioners develop a shorthand to communicate among themselves. The jargon can almost sound like a foreign language.

Footage of people camped out at Best Buy or elsewhere is not remotely a celebration. Rather, it's a reminder of just how economically distressed a large percentage of our populace is.

Hedge fund managers charge so much more than mutual fund managers; alpha is even harder to come by. They end up selling a variety of things beyond mere outperformance.

You have a natural tendency to want an emotionally satisfying tale - and to make investments based on that - despite times when the actual data may be telling you something different.

Most of the time, economic data is fairly benign. I don't wish to imply it is meaningless, but it is not a driver of stock markets. Indeed, the correlation between economic noise and how equity markets perform has been wildly overemphasized.

Whenever I see a forecast written out to two decimal places, I cannot help but wonder if there is a misunderstanding of the limitations of the data, and an illusion of precision.

The beauty of diversification is it's about as close as you can get to a free lunch in investing.

Forecasting is simply not a strength of the species; we are much better with tools and narrative storytelling.

TV producers want ratings and are willing to do nearly anything to get them. They gin up artificial conflicts and create an urgency for even the most minor of economic data points.

Many hedge fund managers have become billionaires; perhaps this - plus their reputations as the smartest guys in the room - is why they have captured the investing public's imagination.

One thing I detest most about the financial press is the lack of accountability. All sorts of nonsense is said without penalty.

Returnless risk' is not how you prepare for a decent retirement.

The good news is that economists are intelligent, engaging and often charming folks. The bad news is their work is often of little use to investors.

Salesmen always need something to sell.

Unlike cheap stocks, inexpensive asset classes have a lower chance of big drawdowns (broad asset classes don't go to zero) and a higher probability of average or better returns.

Returnless risk is not how you prepare for a decent retirement.

This ugly duckling investment will likely need time - quarters, or even years - to blossom into a beautiful swan.

If I am going to trash others for their dumb predictions, I must at least hold myself to the same sort of accountability.

You can blow on the dice all you want, but whether they come up seven is still a function of random luck.

I find it funny that people who didn't think there was any inflation in the pipeline are now talking about stagflation. This is nothing like the 1970's, which was a pretty dismal period and not just because of polyester and disco.

'Excessive regulation in the banking reform bill will destroy a substantial part of our bond-distributing machinery. Can anyone expect that a step of this kind will improve the quality of our long-term investments?'