Words of wisdom in times of turbulence

I had intended to write one Newsletter setting out aphorisms spoken by great investors to help fortify us in the difficult days ahead.  But I came across so many wonderful pieces of advice that I decided to allocate them to seven different categories (seven Newsletters):

1. What happens in the run up of a boom?
2. Beware of crowd-following
3. Investment not speculation
4. Adopting a good psychological posture
5. Adopting the correct attitude to the market
6. How you should behave after the dust has settled
7. Hard work lies ahead

What happens in the run up of a boom?

The speculative public is incorrigible.  In financial terms it cannot count beyond three.  It will buy anything, at any price, if there seems to some “action” in progress.  It will fall for any company identified with “franchising,” computers, electronics, science, technology, or what have you, when the particular fashion is raging.

Benjamin Graham

With few exceptions, an extremely high p/e ratio is a handicap to [shares], in the same way that extra weight in the saddle is a handicap to a racehorse

Peter Lynch

 

The way you’ll know when the market is overvalued is when you can’t find a single company that’s reasonably priced…..predicting the short-term direction of the sto

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