James Grant Quotes

To suppose that the value of a common stock is determined purely by a corporation's earnings discounted by the relevant interest rates and adjusted for the marginal tax rate is to forget that people have burned witches, gone to war on a whim, risen to the defense of Joseph Stalin and believed Orson Welles when he told them over the radio that the Martians had landed.

Successful investing is about having people agree with you ... later.

[C]apitalism without financial failure is not capitalism at all, but a kind of socialism for the rich.

Progress is cumulative in science and engineering, but cyclical in finance.

Central banks have gotten out of the central banking business and into the central planning business, meaning that they are devoted to raising up-if they can-economic growth and employment through the dubious means of suppressing interest rates and printing money. The nice thing about gold is that you can't print it.

To me the gold price takes the form of a very uncomplicated formula, and all you have to do is divide one by 'n.' And 'n', I'm glad you ask, 'n' is the world's trust in the institution of paper money and in the capacity of people like Ben Bernanke to manage it. So the smaller 'n', the bigger the price. One divided by a receding number is the definition of a bull market.

In almost every walk of life, people buy more at lower prices; in the stock market they seem to buy more at higher prices.

Growth at an exceptional rate is a red flag in banking. It is hard enough to manage an ordinary bank; to control a sprouting weed is well-nigh impossible. If loans are expanding too quickly, the lending officers have probably been saying 'yes' too frequently.

Every debt is ultimately paid, if not by the debtor, then eventually by the creditor.

The art of banking is always to balance the risk of a run with the reward of a profit. The tantalizing factor in the equation is that riskier borrowers pay higher interest rates. Ultimate safety - a strongbox full of currency - would avail the banker nothing. Maximum risk - a portfolio of loans to prospective bankrupts at usurious interest rates - would invite disaster. A good banker safely and profitably treads the middle ground.

I believe that there is an important kernel of truth in the idea that financial errors recur every other generation.

The Fed can change how things look, not how things are

Nothing beats a little cash in a bear market, of course, and the oldest form of cash is gold.

Credit is money of the mind.

The 1980s are to debt what the 1960s were to sex. The 1960s left a hangover. So will the 1980s.

It's about bums on seats. If nobody wants to listen to what you are doing, it kind of defeats the purpose really, doesn't it?

In general, markets know more than the people who write about them.

Debt is always repaid, either by the borrower or by the lender.

It is an axiom nowadays that no bank fails for lack of capital; unprofitable lending is always the underlying cause.

Hope sustains life, but misplaced hope prolongs recessions.

[T]he first bad bank loan was no doubt made around the time of the opening of the first bank.