The Greatest Wisdom Is Simplicity; Old Truths Work Best
“Only bonds are investment; stocks are speculation. Investment and speculation: one excels at finding asset value, the other at spotting market defects.” — Benjamin Graham.
What is most common is often most effective. Investing is repeating simple things well.
Over multi‑year cycles, moments that truly matter in the stock market are rare; when they come, act decisively. Compared with institutions, individual investors’ biggest edge is focus and time. Be economically rational, spend your energy finding quality targets, and prefer big opportunities to small tinkering. Returns depend on overall competence; many retail investors invert priorities and fantasize about high returns from high‑frequency trading.
For investors, keep asking: what is a good business? Grow with outstanding companies. Even in short‑term trading, buy assets with growth potential—because the next holder might be a value investor.
Don’t chase overnight riches or rush profits; first protect principal. Resist the itch to trade on your phone. When buying or selling, bargain with yourself first. Every day a few stocks hit limit‑up for various reasons; if you bet just because you happened to see one, you’ll likely end up the bag holder. Markets abound with opportunities; blind buys aren’t worth celebrating even if they win. When opportunities are plentiful, don’t fear missing some.
Avoid chasing highs and bottom‑picking. Don’t buy at fresh highs; after a new high, a pullback is likely. A drop isn’t automatically an opportunity. Perhaps the crowd is right about why it’s falling; perhaps a sharp decline reflects information you don’t have.
Be willing to cut losses; stops are essential defense against black swans. Take profits in time. A conservative approach is monthly settlement: compared with the start of the month, withdraw half of the gains and put them in a separate account.
Treat media reports with skepticism—especially bullish news. A clear example: before the US election, most media favored Hillary Clinton and were proven wrong.
Published at: Sep 13, 2025 · Modified at: Sep 13, 2025
