Quote for the Week
As I see it, the fundamental problem in common stocks is the market’s injection of a large speculative element into the strongest and best companies by establishing an untenably high price for them. This has added greatly to the confusion between investment and speculation, because it is easy to tell oneself that the shares of a good company are always a sound investment, regardless of price. From this it was an easy step to calling everyone an investor who bought his shares outright, and finally to calling every Wall Street customer an investor — period.
My recent crusade has been to persuade Wall Street that it has made a mistake, and harmed itself, in suppressing the word “speculation” from its vocabulary. Speculation is not bad in itself; over speculation is. It is important that the public should have a fairly good idea of the extent to which it is speculating, not only when it buys a “hot issue” at a completely silly price, but even when it buys into a wonderful concern such as IBM at 70 times its highest recorded earnings. To my mind the most valuable contribution that security analysts could make to the art of investing would be the determination of the investment and speculative components in the current price of any given common stock, so that the intending buyer might have some notion of the risks he is taking as well as what profit he might make. — Ben Graham, 1963 (source)
From the Archives
Last Call
- Songs of Experience: Reminiscences of a Strategist – L. Sonders
- Behind the Memo: The Impact of Debt with Howard Marks & Morgan House (podcast) – Oaktree
- Who is Right About Your Money: Traditional Economists or Self-Help Authors? – Clear Thinking
- A Time to Give – J. Clements
- Home Insurance is a Really Big Problem – Kyla’s Newsletter
- Why Positive Outcomes Don’t Always Follow Good Decisions – the3mix
- Gurwinder Bhogal’s Guide to Modern Survival (podcast) – Infinite Loop
- History is in the Making – Works in Progress
- 10 Reasons Why Technological Progress Is Now Reversing – Honest Broker
- The Curious History of Competitive Eating – JSTOR Daily