Recently, the Wall Street Journal published some notes from a lecture by Benjamin Graham that occured in 1963. In there, as usual, the brilliant insight of Mr. Graham shines across the lecture. Since it is a large document, I decided to share and comment some of the most important points from my point of view.
“The argument that common stocks are and always will be attractive, including the present time, because of their excellent record since 1949- involves in those terms a very fundamental and important fallacy. This is the idea that the better the past record of the stock market as such, the more certain it is that common stocks are sound investments for the future… As I see it, the real truth is exactly the opposite, for the higher the stock market advances the more reason there is to mistrust its future action if you are going to consider only the market’s internal behavior. “ Continue Reading »