Back when I was in business school many moons ago, I edited a weekly newsletter for my classmates and also wrote for the school newspaper. One of my favorite columns to prepare was a compilation of amusing quips uttered by our professors. For example, Professor Crawford once told us, "Caveat: I am not a lawyer. And anyone who makes legal decisions based on the opinions of an economist is an idiot." And Professor Robertson noted, "TWA is a flying carcass." He was probably right. The airline was bought by American Airlines [parent: AMR (NYSE:AMR)] in 2001 after not straightening up and flying right for quite a while.
So the other day, I ran across some business school professor quotations from Harvard Business School (HBS) and was tickled that others were collecting and sharing such things. As I scanned through some of them, I noticed that here and there were some useful investing insights. Permit me to share. (Note that the following quotations are from 2002.)
Professor Frances Frei said, "I brought my favorite book to class: Calculus Made Easy. Why are you laughing? This really is my favorite book. The author passed away in 1916. It's the best math book and the best book in my opinion. I love this stuff." First off, this caught my notice because back in the 1990s, when I was attending another business school, Professor Frei was one of my own professors, and one whom I used to quote. So it was nice to see that she's still making students chuckle. Beyond that, though, it's useful to remember that a lot of wisdom in the world isn't too new. A great investing and personal finance book, for example, is Fred Schwed Jr.'s 1940 book, Where Are The Customers' Yachts? It addresses topics such as conflicts of interest among professional money managers -- ones that persist today.
HBS Professor Andre Perold said, "What's the worst case scenario? Lose everything. That's always the worst case scenario." This is important to remember, because sometimes we buy stocks or other investments, assuming that our downside risk is much less than it is. Sure, a stock isn't likely to fall to zero, but it could drop 50% or more. And in some cases, it could go to zero.
Here's another nugget from Professor Perold: "Back in the 80s, when there was a negative earnings surprise, a disappointment, you had weeks before the market would react. You could just lie on the beach, write a little note for a trade order, stick it in a bottle and float it off." As someone who invested very little in the 1980s, this was useful historical info for me.
Professor Richard Tedlow noted, "[IBM (NYSE:IBM) founder] Thomas J. Watson Sr. was free with a dollar bill, unlike [Wal-Mart (NYSE:WMT) founder] Sam Walton, who would squeeze it until it shrieked." Again, interesting details that can inform your impression of these company's corporate cultures.
Professor Tom DeLong said, "Four years in a row, growing up, I remember giving my mother a basketball for Christmas. Just because something is important to you, doesn't mean it is important to others." This is true for corporations, too. Think back to when eBay (NASDAQ:EBAY) published a magazine. It's not around anymore. Could it be that eBay customers were more interested in buying and selling than in reading about buying and selling and other topics?
Even more useful words
Don't just wait to run across useful insights from others. Seek them out. Ask people what financial lessons they've learned in life and what mistakes they've made.
One good place to find some advice is in our Rule Your Retirement newsletter, which happens to be the retirement guidance source that I refer to most often. (You can check it out for free. A free trial will give you access to all past issues.) It often features stories about people who retired early and who share their secrets, which can help you retire earlier.
Here's a sampling of some very useful articles from past issues:
- In the June 2006 issue, newsletter editor Robert Brokamp addressed international investing, rerecommending an international mutual fund that advanced some 50% since he first mentioned it back in December of 2004.
- In the January 2006 issue, Robert tackled asset allocation and explained how we can "avoid Uncle Sam's grabby hands." He listed a host of popular investments, such as bonds and dividend-paying stocks, in order of tax efficiency.
- In the May 2005 issue, readers were taught how to withdraw money prudently in retirement, in order to make it last.
- The October 2005 issue delved into dividends and offered some recommended dividend payers. [Some firms that are paying significant dividends today include Citigroup (NYSE:C), with a recent yield around 3.9%, and Verizon (NYSE:VZ), with a recent yield around 4.5%.]
These articles may also be of interest:
- Can You Retire in 2016?
- Prepare for a Gruesome Retirement
- $1 Million May Not Be Enough
- 9 Retirement Killers
Here's to a happier portfolio! (And, hey, consider forwarding this article to anyone whose financial future you care about. Just click on the "Email this Page" link near the top of the page.)
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Longtime Fool contributor SelenaMaranjian 's favorite discussion boards include Book Club, The Eclectic Library, Television Banter, and Card & Board Games. She owns shares of eBay and Wal-Mart. For more about Selena, view her bio and her profile. You might also be interested in these books she has written or co-written: The Motley Fool Money Guide and The Motley Fool Investment Guide for Teens . The Motley Fool is Fools writing for Fools.
