Batting Average

“Even the best investment analyst is going to be right just two out of three times.” Sir John Templeton

“Keep in mind what John Templeton says – the best investment analyst is going to be right two out of three times. This is a business where you are not going to bat a thousand and if you’re batting 0.6 or 0.65 you, at least from Templeton’s pointy of view, are pretty much hitting the upper limits of what you’re going to bat.” Mohnish Pabrai

“Most traders make money only in the 50 to 55 percent range. That means you’re going to be wrong a lot. If that’s the case, you better make sure your losses are as small as they can be, and that your winners are bigger.” Steve Cohen

“Give or take 10%, I am right 50% of the time.” Michael Steinhardt

“No speculator can be right all the time. If a speculator is correct half of the time he is hitting a good average. Even being right three or four times out of ten should yield a personal fortune if he has the sense to cut his losses quickly on the venture where he has been wrong.” Bernard Baruch

“I am a professional mistake maker. One third of my trades are probably wrong.” Ray Dalio

“I always say to people who come in to see me that you have to realize in our business a really, really good person is wrong 30% of the time. That's a world class investor. Are you comfortable being wrong 30% of the time? By the way, you can't be wrong in a massive way.” John Phelan

“If I can be right 60 percent of the time, and when I am right I have some big winners, and when I am wrong, I staunch the losses quickly, I can make a lot of money.” Martin Taylor

"Doctors usually make poor investors. A doctor has to be as close as possible to infallible with his patients. He can't be right two thirds of the time. If he were only right that often, he ought to be thrown out of the profession. But in investing, it's fine to be right two-thirds of the time. So when doctors start to invest and discover how things really are, they get nervous and bothered." Phil Carret

“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong” George Soros

“If you’re terrific in this business, you’re right six out of 10.” Peter Lynch

“I find that investing is not about earning a favourable return on every holding – it is about developing a favourable batting average.” Ed Wachenheim

“During 68 years on Wall Street, I have been wrong about 30 percent of the time. That means a lot of losses. But it’s the 70 percent right that matters. If any investment had been right all the time, he or she would have accumulated a considerable portion of the world’s wealth. But as you might suspect, always-right investors don’t exist, except among liars.” Roy Neuberger

“The combination of two mistakes and one success can be enough to earn decent returns. In this line of thinking, selling quickly our losers and holding on to your winners is a constructive way to manage portfolios. Doing the other way around is the equivalent – to use Peter Lynch’s words – of removing the flowers and watering the weeds.” Francois Rochon

“A hypothetical ‘A’ in the investing world, the point at which you are performing at the highest level, only requires being right more than half the time.” Scott Ostfeld

“Our portfolio managers have a tough job as you are wrong half the time. They get a report card every day that is an F. It happens to be that 53%/47% still is very profitable in finance but it’s still a tough report card. We hire the best and brightest and they go from having 90’s as their average test score to 53%.” Ken Griffin

“John Templeton said something to me a couple of years ago – he said if you are right 60% of the time and wrong 40% you will be a hero and if you are right 40% and wrong 60%, you will be a bum. But I am sure he used more gracious language than that.” Peter Cundill

“If an investor is right 2 out of 3 times in the investment decisions they make, they would hit the ball so far out of the park, it would be amazing.” Mohnish Pabrai

“Five to one means I’m risking one dollar to make five. What five to one does is allow you to have a hit ratio of 20%. I can actually be a complete imbecile. I can be wrong 80% of the time, and I’m still not going to lose.” Paul Tudor Jones

“So you have flops. Maybe you're right 5 or 6 times out of 10. But if your winners go up 4- or 10- or 20-fold, it makes up for the ones where you lost 50%, 75%, or 100%.” Peter Lynch