The conquest of inflation was a landmark accomplishment with enduring benefits, but it came with heavy costs. After a brief recession in 1980 and a short rebound, the economy slumped deeply in 1981 and 1982
Among other factors, indicators of extremes of euphoria seem much more important than price
On this basis it could be argued that, at that time, since expected returns were well below historic norms, prices were too high.
The intelligent investor should be interested in the possibilities of profiting from these pendulum swings. There are two possible ways by which he may try to do this: the way of timing and the way of pricing.
My firm judged me qualified to write their daily market letter, based on the fact that I had one month’s experience in Wall Street
Using trailing twelve months earnings that are impacted by a recession is a mistake
They looked at the allocation between stocks, bonds and cash. They found that over 95 percent of the funds’ returns came from their asset allocation.
The investor does not have to be an expert in macro-economic theory.
Today’s investor cannot tell what percentage gain in earnings, dividends and prices he may expect in the next ten years
I am not attuned to this market environment, and I don’t want to spoil a decent record by trying to play a game I don’t understand just so I can go out a hero.