James O'Shaughnessy Quotations

We believe that people moving their portfolios to an overweight in bonds will be disappointed over the long-term and will significantly underperform an asset allocation that over-weights equities.

Momentum as a selection criteria works very well. My data suggests that you don't want to focus on laggards, even after they've turned the corner,

Historically, we have always seen reversion to the mean. After stocks have had an unusually great 10 or 20 years, they typically turn in subpar results over the next 10 or 20, and after bad 10- to 20-year stretches, the next 10 to 20 tend to be above average.

I tell people to design their ideal life. What do you want to do? What do you want to be? ... Sit down, add up your expenses, write out your life.

You'll get nowhere buying stocks just because they have a great story.

We continue to advise that investors remain committed to a patient, long-term outlook and that the best way to do well in stocks is to use a disciplined, time-tested strategy that has the benefit of empirically tested results over a variety of market environments.

Tip number one is you have to start saving immediately,

Fear, greed and hope have destroyed more portfolio value than any recession or depression we have ever been through.

The model never varies. It never has an ego problem; it never has a fight with its spouse; it never wants to prove that it's right. The model is never hung-over after a night of partying -- it just does the same thing, time and time again. Very boring, very profitable.

It seems that the one thing that doesn't change is people's reaction to short-term conditions and their axiomatic ability to perpetuate them far into the future.

Stocks change. Industries change. But the underlying reasons certain stocks are good investments remain the same. Only the fullness of time reveals which are the most sound.

The average investor does significantly worse than a simple index... It's literally because of the way our brains are wired.

Industries that make goods and services that people have to buy, regardless of economic circumstances, are bound to do well whatever the economic conditions.

If you are an investor who's retired and hopes to live off the income that your portfolio is generating, then we would focus just on the dividend yield.

If you have a 401(k) at work and you don't use it, it's like literally walking by buckets of money every day,

If you're an investor who wants a little bit more from the capital-appreciation side of things, but still likes this concept of getting 'paid by the company,' then we would tell that investor to pursue shareholder yield.

If you're indexing to the S&P 500, you're buying the most expensive names in the market.

If you look back to the most spectacular blow ups in history, you can always tie them to a couple things: They were extraordinary complicated strategies that maybe even the practitioners themselves didn't understand, and they were overleveraged.

In terms of thinking about market valuations, think, do I care? My goals are 10, 20 years from now, not now. If you have shorter-term goals, you should be aware that market valuations fluctuate wildly.

By relying on the statistical information rather than a gut feeling, you allow the data to lead you to be in the right place at the right time. To remain as emotionally free from the hurly burley of the here and now is one of the only ways to succeed.

The truth seems to love the small print.

History depends on who is telling the story.

Arbitrage human nature. It's not going to change any time soon.