Quote for the Week
Real investment risk is measured not by the percent that a stock may decline in price in relation to the general market in a given period, but by the danger of a loss of quality and earning power through economic changes or deterioration of management. In the five editions of The Intelligent Investor I have used the example of A&P shares in 1936-1939 to illustrate the basic difference between fluctuations in price and changes in value. By contrast, in the last decade the price decline of A&P shares from 43 to 8 paralleled pretty well a corresponding loss of trade position, profitability, and intrinsic value. The idea of measuring investment risk by price fluctuations is repugnant to me, for the very reason that it confuses what the stock market says with what actually happens to the owners’ stake in the business. — Benjamin Graham (source)
From the Archives
Last Call
- Courage Required – W. Bernstein
- Country Risk: A July 2023 Update – Musings on Markets
- Everything is Cyclical – M. Housel
- It’s Not in Your Head, It’s in Your Eyes as Well – Klement on Investing
- Humans Will Trade Pain for Useless Information – Science
- Bruce Lee & Me – K. Abdul-Jabbar
- Floppy Flop – Tedium
- The Psychology of Disneyland – SatPost
- Photocopiers Terrified the Publishing World – NewArt
