Money and Finance
Timeless thoughts from a 1959 speech, much of which probably could be said today as well:
- Phil Fisher On Financing Growth
From Common Stocks and Uncommon Profits: Therefore, if investment is limited to outstanding situations, what really matters is whether the company's cash plus further borrowing ability is sufficient to take care of the capital needed to exploit the...
- Graham And Dodd On Private Owner Valuation
From Security Analysis:The other application of the principle of investing in undervalued common stocks is directed at individual issues, which upon analysis appear to be worth substantially more than they are selling for. It is rare that a common stock...
- Excerpt From Warren Buffett’s 1957 Partnership Letter
An excerpt from Warren Buffett’s 1957 letter that may be useful to think about in regards to current stock market levels:In last year's letter to partners, I said the following: My view of the general market level is that it is priced above...
- Giverny Capital – 2013 Letter To Partners
Link to letter: Giverny Capital – 2013 Letter to PartnersSince 1993, the cornerstone of our investment philosophy is based on Benjamin Graham’s book “The Intelligent Investor”, first published in 1949. In it, Graham wrote: “In the short...
- Folly Of The Fed: Why Janet Yellen May Be A Dangerous Choice - By Andrew Smithers
Found via Jon Shayne's Blog. The pending appointment of Janet Yellen as chair of the Federal Reserve Board of Governors gives me great cause for concern. By all reports, she is highly intelligent and, in the opinion of her peers, highly qualified...
Money and Finance
Ben Graham quote
Timeless thoughts from a 1959 speech, much of which probably could be said today as well:
Speculative Excesses in the Current Market
In this connection, I arrive finally at a “law” about human nature that cannot be repealed and it is unlikely to be modified to any great extent. This law says that people without experience or superior abilities may make a lot of money fast in the stock market, but most cannot keep what they make, and most of them will end up as net losers. (This is true even though the long-term trend of stock prices has been definitely upward.)
This is a particular application of a much wider natural law which may be stated simply as: “There is no such thing as a free lunch,” for those too young to remember, was offered in the good old days to patrons of the corner saloon.
The stock market has undoubtedly reached a stage where there are many people interested in free lunches. The extraordinary price levels of stock of rather new companies in the electronics and similar fields, the spate of new common-stock offerings of small enterprises at prices twenty five or more times their average earnings and three times their net worth (with immediate price advances upon issuance), the completely unwarranted price discrepancies indicate reckless elements in the present stock market picture which foretell serious trouble ahead, if past experience means anything at all.
Let me conclude with one of my favorite clichés – the French saying: “The more it changes the more it’s the same thing.” I have always thought this motto applied to the stock market better than anywhere else. Now the really important part of this proverb is the phrase “the more it changes.” The economic world has changed radically and it will change even more. Most people think now that the essential nature of the stock market has been undergoing a corresponding change. But if my cliché is sound – and a cliché’s only excuse, I suppose, is that it is sound – then the stock market will continue to be essentially what it always was in the past – a place where a big bull market is inevitably followed by a big bear market. In other words, a place where today’s free lunches are paid for doubly tomorrow. In the light of experience, I think the present level of the stock market is an extremely dangerous one.
[H/T James]
- Phil Fisher On Financing Growth
From Common Stocks and Uncommon Profits: Therefore, if investment is limited to outstanding situations, what really matters is whether the company's cash plus further borrowing ability is sufficient to take care of the capital needed to exploit the...
- Graham And Dodd On Private Owner Valuation
From Security Analysis:The other application of the principle of investing in undervalued common stocks is directed at individual issues, which upon analysis appear to be worth substantially more than they are selling for. It is rare that a common stock...
- Excerpt From Warren Buffett’s 1957 Partnership Letter
An excerpt from Warren Buffett’s 1957 letter that may be useful to think about in regards to current stock market levels:In last year's letter to partners, I said the following: My view of the general market level is that it is priced above...
- Giverny Capital – 2013 Letter To Partners
Link to letter: Giverny Capital – 2013 Letter to PartnersSince 1993, the cornerstone of our investment philosophy is based on Benjamin Graham’s book “The Intelligent Investor”, first published in 1949. In it, Graham wrote: “In the short...
- Folly Of The Fed: Why Janet Yellen May Be A Dangerous Choice - By Andrew Smithers
Found via Jon Shayne's Blog. The pending appointment of Janet Yellen as chair of the Federal Reserve Board of Governors gives me great cause for concern. By all reports, she is highly intelligent and, in the opinion of her peers, highly qualified...