JOHN WOODS & ASSOCIATES LIMITED
INSTITUTIONAL INVESTMENT ADVISERS
This web-page contains a selection of favourite quotes, arranged alphabetically by
author or subject. We intend to revise and extend the content periodically.
SIR THOMAS BEECHAM
On his seventieth birthday, he was entertained to lunch by a great host of his admirers.
Telegrams and cables from distinguished persons arrived from all parts of the world.
To reverberating applause the chairman read them one after another.
“Congratulations”, “Greetings” – from Strauss, Hindemith and so on; then, finally,
from Sibelius. And as the cheering died down, Sir Thomas looked up to the chairman
from his place at the table and asked, with a slightly pained expression on his face,
“Nothing from Mozart?”
(SIR THOMAS BEECHAM: A MEMOIR by Neville Cardus, p 126)
If I were a dictator I should make it compulsory for every member of the population
between the ages of four and eighty to listen to Mozart for at least a quarter of an hour
daily for the coming five years.
NEVILLE CARDUS
Those spectators on Saturday who complained that Gunn’s scoring was slow rather
misunderstand Gunn’s relationship to cricket. An innings by Gunn cannot be referred
to the scoreboard or even to the state of the game. His batsmanship is, like every other
precious thing on the earth, free from any obligation to be other than itself; Gunn is an
artist and therefore answerable to none but his own temperamental promptings. You
may grumble, if you wish, at Gunn because he frequently gets runs slowly — just as you
may grumble at Kreisler when he plays bad music. But the art for art’s sake of Gunn’s
cricket will captivate you as entirely as the art for art’s sake of Kreisler’s fiddling.
(Lancashire win the 1926 Title, reproduced in PLAY RESUMED WITH CARDUS)
Of all the men in the Lancashire side, it was Makepeace who was our Danton, saying
with a militant bat: “What we need for victory is audacity, audacity, and always
audacity”. Makepeace played always the innings of his career; he was the first to set the
conqueror’s pace for his county and did so by an astonishing change from his
customary methods. The old warhorse forgot his years and scars; he was mettlesome,
crying “Ha! Ha!” amongst the trumpets. He scored 180 out of 358 in four hours and a
half; in two hours after lunch he galloped from 56 to 180, and hit the ball into most
parts of the field... Old Trafford looked upon this wonderful tour de force of
Makepeace — it was nothing less — with eyes almost incredulous. It was an innings
which moved one by its devotion to Lancashire county.
(ibid.)
Regulated by the FSA in the conduct of investment business
JWAL
FAVOURITE QUOTES
What is a critic to say of Mozart at his most felicitous? The purer the music the less
there is to be said about it. In the chamber music of Mozart we come upon the well of
music pure and undefiled. Not that we are not moved into deep moods. Where in all
music is there anything more poignant than the slow movement of the G minor
Quintet [K516]?
(Genius, MANCHESTER GUARDIAN, 17 November 1927, reproduced in CARDUS ON MUSIC)
THOMAS CARLYLE
The Dismal Science.
(On political economy, LATTER–DAY PAMPHLETS)
CHARLES DICKENS
Now, what I want is, Facts … Facts alone are wanted in life.
(Mr Gradgrind, HARD TIMES)
BENJAMIN DISRAELI
He declined a deathbed visit from [Queen] Victoria, who genuinely admired him —
‘She would only ask me to take a message to Albert’.
(Robert Tombs: THE ENGLISH AND THEIR HISTORY, 2014, p 499)
ALBERT EINSTEIN
A theory is the more impressive, the simpler are its premises, the more distinct are the
things it connects and the broader is its range of applicability.
(E Zeidler: NONLINEAR FUNCTIONAL ANALYSIS AND ITS APPLICATIONS II/A – LINEAR
MONOTONE OPERATORS, Berlin: Springer-Verlag, 1990.)
EUGENE FAMA
Market efficiency per se is not testable.
(E F Fama: Efficient Capital Markets II, Journal of Finance, vol. 77, 1991, p 1575)
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JOACHIM FEST
Etiam si omnes — ego non!
(Joachim Fest, NOT I: A GERMAN CHIDHOOD, 2012)
EUGENE FAMA & KENNETH FRENCH
The CAPM {Capital Asset Pricing Model], like Markowitz’s (1952, 1959) portfolio
model on which it is built, is nevertheless a theoretical tour de force. We continue to
teach the CAPM as an introduction to the fundamental concepts of portfolio theory
and asset pricing, to be built on by more complicated models like Merton’s (1973)
ICAPM. But we also warn students that despite its seductive simplicity, the CAPM’s
empirical problems probably invalidate its use in applications.
(E F Fama & K R French: The Capital Asset Pricing Model – Theory and Evidence, Journal of
Economic Perspectives, vol. 18, 2004, p 44)
HENRY FIELDING
Fashion is the great governor of the world: it presides not only in matters of dress and
amusement, but in law, physic, politics, religion, and all other matters of the gravest
kind: indeed, the wisest of men would be puzzled to give any better reason why
particular forms in all these have been at certain times universally received, and at
others universally rejected, than that they were in or out of fashion.
(THE TRUE PATRIOT, VOLUME 1)
J K GALBRAITH
Finally, even in countries such as the United States, where faith in free enterprise is one
of the minor branches of theology, the state plays an increasing role in affairs.
(REITH LECTURES 1966: THE NEW INDUSTRIAL STATE: Lecture 1 — Planning and
Technological Imperatives, 13 November 1966)
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BENJAMIN GRAHAM
In most periods the investor must recognise the existence of a speculative factor in his
common-stock holdings. It is his task to keep this component within minor limits and
be prepared financially and psychologically for adverse results that may be of short or
long duration.
(THE INTELLIGENT INVESTOR)
We are thus led to the following logical if disconcerting conclusion: to enjoy a
reasonable chance for continued better than average results, the investor must follow
policies which are (1) inherently sound and promising, and (2) not popular on Wall
Street.
(op. cit.)
Confronted with a like challenge to distil the secret of sound investment into three
words, we venture the motto, MARGIN OF SAFETY.
(op. cit.)
OTTO VON HABSBURG
He could visit Austria only in 1966, five years after reluctantly renouncing his claim to
the throne, becoming — there and there only — humble Mr Habsburg–Lothringen. He
found his compatriots' post–imperial neuroses a tempting target for his jokes. Told of
an Austria-Hungary football match, he asked impishly: “Whom are we playing?”
(Obituary in The Economist, 14 July 2011)
ANDREW G HALDANE
To provide some context, assuming a normal distribution, a 7.26–sigma daily loss would
be expected to occur once every 13.7 billion or so years. That is roughly the estimated
age of the universe. A 25–sigma event would be expected to occur once every 6 x 10124
lives of the universe. That is quite a lot of human histories. When I tried to calculate the
probability of a 25–sigma event occurring on several successive days, the lights visibly
dimmed over London.
(Why Banks Failed the Stress Test, Speech given by Mr Haldane, at the time Executive
Director for Financial Stability, Bank of England, 13 February 2009.
See DAVID VINIAR below.)
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FAVOURITE QUOTES
A few years ago, ahead of the present crisis, the Bank of England and the FSA
commenced a series of seminars with financial firms, exploring their stress-testing
practices. The first meeting of that group sticks in my mind. We had asked firms to tell
us the sorts of stress which they routinely used for their stress-tests.
A quick survey suggested these were very modest stresses. We asked why. Perhaps
disaster myopia – disappointing, but perhaps unsurprising? Or network externalities –
we understood how difficult these were to capture?
No. There was a much simpler explanation according to one of those present. There
was absolutely no incentive for individuals or teams to run severe stress tests and show
these to management. First, because if there were such a severe shock, they would very
likely lose their bonus and possibly their jobs. Second, because in that event the
authorities would have to step-in anyway to save a bank and others suffering a similar
plight.
All of the other assembled bankers began subjecting their shoes to intense scrutiny. The
unspoken words had been spoken. The officials in the room were aghast. Did banks
not understand that the official sector would not underwrite banks mismanaging their
risks?
Yet history now tells us that the unnamed banker was spot-on. His was a brilliant
articulation of the internal and external incentive problem within banks. When the big
one came, his bonus went and the government duly rode to the rescue. The time
consistency problem, and its associated negative consequences for risk management,
was real ahead of crisis. Events since will have done nothing to lessen this problem, as
successively larger waves of institutions have been supported by the authorities.
(op. cit.)
JASCHA HEIFETZ
One Russian is an anarchist; two Russians are a chess game; three Russians are a
revolution; four Russians are the Budapest String Quartet.
(Attributed)
BARRY JOHN
You throw it and I’ll catch it.
(To Gareth Edwards, both Welsh rugby union internationals)
DR JOHNSON
Pension: Pay given to a state hireling for treason to his country.
(A DICTIONARY OF THE ENGLISH LANGUAGE)
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MICHAEL JENSEN
There is no other proposition in economics which has more solid empirical evidence
supporting it than the Efficient Markets Hypothesis.
(Some Anomalous Evidence Regarding Market Efficiency, Journal of Financial Economics,
volume 6, 1978.)
JUVENAL
Sed quis custodiet ipsos custodies?
But who is to guard the guards themselves?
(SATIRES)
Duas tantum res anxius optat, panem et circenses.
Only two things does [the modern citizen] anxiously wish for – bread and circuses.
(SATIRES)
JOSEPH KERMAN
Tosca, that shabby little shocker...
(OPERA AS DRAMA, p 205)
J M KEYNES
The study of economics does not seem to require any specialized gifts of an unusually
high order. Is it not, intellectually regarded, a very easy subject compared with the
higher branches of philosophy and pure science? Yet good, or even competent,
economists are the rarest of birds. An easy subject, at which very few excel! The
paradox finds its explanation, perhaps, in that the master-economists must possess a
rare combination of gifts. He must reach a high standard in several different directions
and must combine talents not often found together. He must be mathematician,
historian, statesman, philosopher — in some degree. He must understand symbols and
speak in words. He must contemplate the particular in terms of the general, and touch
abstract and concrete in the same flight of thought. He must study the present in the
light of the past for the purposes of the future. No part of man’s nature or his
institutions must lie entirely outside his regard. He must be purposeful and
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disinterested in a simultaneous mood; as aloof and incorruptible as an artist, yet
sometimes as near the earth as a politician.
(ESSAYS IN BIOGRAPHY, pp 173–4)
Professor Planck, of Berlin, the famous originator of the Quantum Theory, once
remarked to me that in early life he had thought of studying economics, but had found
it too difficult!
(op. cit., p 186, fn. 2)
The celebrated optimism of traditional economic theory, which has led to economists
being looked upon as Candides, who, having left this world for the cultivation of their
gardens, teach that all is for the best in the best of all possible worlds provided we will
let well alone, is also to be traced, I think, to their having neglected to take account of
the drag on prosperity which can be exercised by an insufficiency of effective demand.
For there would obviously be a natural tendency towards the optimum employment of
resources in a Society which was functioning after the manner of the classical
postulates. It may well be that the classical theory represents the way in which we
should like our Economy to behave. But to assume that it actually does so is to assume
our difficulties away.
(THE GENERAL THEORY OF EMPLOYMENT, INTEREST AND MONEY, CHAPTER 3)
The classical theorists resemble Euclidean geometers in a non-Euclidean world who,
discovering in experience straight lines apparently parallel often meet, rebuke the lines
for not keeping straight – as the only remedy for the unfortunate collisions which are
occurring. Yet, in truth, there is no remedy except to throw over the axiom of parallels
and to work out a non-Euclidean geometry.
(ibid.)
Even outside the field of finance, Americans are apt to be unduly interested in
discovering what average opinion believes average opinion to be; and this national
weakness finds its nemesis in the stock market.
(op. cit., CHAPTER 12)
When the capital development of a country becomes a by-product of the activities of a
casino, the job is likely to be ill-done.
(ibid.)
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FAVOURITE QUOTES
It is generally agreed that casinos should, in the public interest, be inaccessible and
expensive. And perhaps the same is true of Stock Exchanges.
(ibid.)
Worldly wisdom teaches that it is better for reputation to fail conventionally than to
succeed unconventionally.
(ibid.)
The actual, private object of the most skilled investment today is “to beat the gun”, as
the Americans so well express it, to outwit the crowd, and to pass the bad, or
depreciating, half-crown to the other fellow.
(ibid.)
Professional investment may be likened to those newspaper competitions in which the
competitors have to pick out the six prettiest faces from a hundred photographs, the
prize being awarded to the competitor whose choice most nearly corresponds to the
average preferences of the competitors as a whole.
(ibid.)
M A KING
I don’t think I appreciated the scale of the shocks that could occur... I suppose the
thing I hadn’t really appreciated was a key part of the work of Keynes. It was the idea
that the future is unknowable. Cash is fundamental to the day–to–day running of the
economy. At the same time, it’s the asset that you move into when you have no idea
what to do. That is why our monetary economy is so unstable
(Interview with Mervyn King, at the time Governor of the Bank of England, Financial Times,
15/16 June 2013)
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FRANK H KNIGHT
The practical difference between the two categories, risk and uncertainty, is that in the
former the distribution of the outcome in a group of instances is known (either from
calculation a priori or from statistics of past experience), while in the case of
uncertainty this is not true, the reason being that it is impossible to form a group of
instances, because the situation dealt with is in a high degree unique… It is this true
uncertainty which by preventing the theoretically perfect outworking of the tendencies
of competition gives the characteristic form of “enterprise” to economic organisation as
a whole and accounts for the peculiar income of the entrepreneur.
(RISK, UNCERTAINTY AND PROFIT)
SAMUEL LANGFORD
Cardus would no doubt have been ready with an answer – which might have been that
it was no use expecting pious gravity from a critic who at an impressionable age had sat
next to Samuel Langford and heard him whisper in the Grail Scene: “Amfortas is the
wisest man here tonight: he’s brought his bed with him.”
(J B Steane: VOICES, SINGERS AND CRITICS, London: Duckworth, 1992, p 278)
Note: Samuel Langford was musical critic of the Manchester Guardian from 1905 until he
died in May 1927.
HARRY MARKOWITZ
Usually if the term ‘yield’ were replaced by ‘expected yield’ or ‘expected return,’ and
‘risk’ by ‘variance of return’, little change of apparent meaning would result.
(H Markowitz: Portfolio Selection, Journal of Finance, vol. 7, 1952, p 89)
MERTON H MILLER
When asked to explain in twenty five words or less, the essence of his contributions
with Franco Modigliani, Merton Miller said:
If you transfer a dollar from your right pocket to your left pocket, you are no
wealthier. Franco and I proved that rigorously.
(H Shefrin: BEYOND GREED AND FEAR, Harvard Business School Press, 2000.)
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PLINY THE ELDER
Optimumque est, ut volgo dixere, aliena insania frui.
And the best plan is, as the popular saying was, to profit by the folly of others.
(HISTORIA NATURALIS)
CHARLES “CHUCK” PRINCE
When the music stops, in terms of liquidity, things will be complicated. But as long as
the music is playing, you’ve got to get up and dance. We’re still dancing.
(As reported in CITIGROUP CHIEF STAYS BULLISH ON BUY-OUTS by MICHIYO NAKAMOTO and
DAVID WIGHTON, FINANCIAL TIMES, 10 JULY 2007. At the time, Mr Prince was CEO of
Citigroup.)
STEPHEN ROSS
To make a parrot into a learned financial economist, he only needs to learn the single
word “arbitrage”.
(S Ross: The Interrelations of Finance and Economics: Theoretical Perspectives, American Economic
Review, vol. 77, 1987, p 30)
W B REDDAWAY
At an early stage in its history, the College Investment Committee regarded its typist as
surprisingly well-educated in economic affairs when she recorded a decision “not to
hold any guilt–edged securities”.
(INVESTING FOR NOT–FOR–PROFIT INSTITUTIONS, 1992)
LAURENCE H SUMMERS
Most ketchup economists regard the efficiency of the ketchup market as the best
established fact in empirical economics.
(L H Summers: On Economics and Finance, Journal of Finance, vol. 40, 1985, p 634)
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FAVOURITE QUOTES
TITTA RUFFO
Caruso did not return to London this year [1903]... Neither of the two coloratura
sopranos ... were liked; but Titta Ruffo, making his debut as Enrico in Lucia, was so
successful and created such an impression at the dress rehearsal of Rigoletto which he
was due to sing with {Nelli] Melba that she protested that he was too young to play her
father, and he was removed from the cast. He never sang again at Covent Garden.
Several years later when he had become an international celebrity he had his revenge;
he and Melba were billed to sing in the same work at another famous opera house, and
this time Ruffo objected — on the grounds that Melba was too old to be his daughter!
(H Rosenthal: TWO CENTURIES OF OPERA AT COVENT GARDEN, London: Putnam, 1958, pp
299–300.)
“In my lifetime there have been three miracles — Caruso, [Rosa] Ponselle and Ruffo.
Apart from these have been several wonderful singers.” Tullio Serafin’s summation is
often quoted, as is the rival baritone Giuseppe De Luca’s ‘No era una voce, era un
miracolo.’”
Throughout the {second world] war he lived in difficult and dangerous conditions. But
his voice was heard once more in public. In July 1943 the news spread that the dictator
[Mussolini] had been arrested at the Villa Savoia, and in Florence the sixty–six–year–
old Titta Ruffo opened his window and sang the Marseillaise.”
(J B Steane: SINGERS OF THE CENTURY – FIRST SERIES, London: Duckworth, 1996, pp 161 &
165.)
EMANUEL SCHIKANEDER
Tamino:
Ein Weiser pruft und achtet nicht
Was der gemeine Pobel spricht.
A wise man tests and does not heed
What the common rabble says.
(DIE ZAUBERFLOTE, ACT II – MUSIC BY W A MOZART)
SHAKESPEARE
I will have my bond.
(THE MERCHANT OF VENICE, Act III, Scene V)
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FAVOURITE QUOTES
So may the outward shows be least themselves:
The world is still deceived with ornament.
(THE MERCHANT OF VENICE, Act III, Scene II)
Exit, pursued by a bear.
(THE WINTER’S TALE, Act III, Scene III – stage direction)
DAVID VINIAR
We are seeing things that are 25-standard deviation moves, several days in a row.
(CFO, Goldman Sachs, reported in the FINANCIAL TIMES, 14 August 2007)
VOLTAIRE
Le sens commun est fort rare.
(DICTIONNAIRE PHILOSPHIQUE)
OSCAR WILDE
There is only thing in the world worse than being talked about, and that is not being
talked about.
(PICTURE OF DORIAN GRAY)
A man cannot be too careful in his choice of enemies.
(PICTURE OF DORIAN GRAY)
Cecil Graham:
What is a cynic?
Lord Darlington:
A man who knows the price of everything and the value of nothing.
(LADY WINDERMERE’S FAN)
Lady Bracknell:
… Do you smoke?
Jack:
Well, yes, I must admit I smoke.
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FAVOURITE QUOTES
Lady Bracknell:
I am glad to hear it. A man should always have an occupation of
some kind.
(THE IMPORTANCE OF BEING EARNEST)
Lady Bracknell:
… I have always been of the opinion that a man who desires to get
married should know either everything or nothing. Which do you
know?
Jack (after some hesitation): I know nothing, Lady Bracknell.
Lady Bracknell:
I am pleased to hear it. I do not approve of anything that tampers
with natural ignorance. Ignorance is like a delicate exotic fruit;
touch it and the bloom is gone. The whole theory of modern
education is radically unsound. Fortunately in England at any rate,
education produces no effect whatsoever.
(THE IMPORTANCE OF BEING EARNEST)
Lady Bracknell:
… What is your income?
Jack:
Between seven and eight thousand a year.
Lady Bracknell (makes a note in her book): In land, or in investments?
Jack:
In investments, chiefly.
Lady Bracknell:
That is satisfactory. What between the duties expected of one
during one’s lifetime and the duties extracted from one after one’s
death, land has ceased to be either a profit or a pleasure. It gives
one position, and prevents one from keeping it up. That’s all that
can be said about land.
(THE IMPORTANCE OF BEING EARNEST)
`
Miss Prism:
… Cecily, you will read your Political Economy in my absence. The
chapter on the fall of the rupee you may omit. It is somewhat too
sensational. Even these metallic problems have their melodramatic
side.
(THE IMPORTANCE OF BEING EARNEST)
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