STREET DOGS: Ben Graham
‘The main need here is for the investor to select some rule which will keep him out of mischief’ – Benjamin Graham
From a talk by economist Ben Graham on November 15 1963: In early 1955 … the stock market was then about 400, my central value was also around 400. [But] the action of the stock market since then would appear to demonstrate that these methods of valuations are ultra-conservative and much too low. Unfortunately, in this kind of work, where you are trying to determine relationships based on past behaviour, the almost invariable experience is that by the time you have had a long enough period to give you sufficient confidence in your form of measurement, new conditions supersede and the measurement is no longer dependable for the future. My reason for thinking that we shall have these wide fluctuations … is that I don’t see any change in human nature vis-à-vis the stock market which is sufficient to establish more restraints in the public behaviour than it showed over so many decades in the past. It is not impossible that the market’s high level alone could sooner or later precipitate ...
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