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“An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.
The distinction between investment and speculation in common stocks has always been a useful one and its disappearance is a cause for concern.
Outright speculation is neither illegal, immoral, nor (for most people) fattening to the pocketbook.
The defensive investor must confine himself to the shares of important companies with a long record of profitable operations and in strong financial condition.
It is no difficult trick to bring a great deal of energy, study, and native ability into Wall Street and to end up with losses instead of profits.
the investor who selects issues chiefly on the basis of this year’s superior results, or on what he is told he may expect for next year, is likely to find that others have done the same thing for the same reason.
How many enterprising investors could count on having the acumen or prophetic gift to beat the professional analysts at their favorite game of estimating long-term future earnings?
To enjoy a reasonable chance for continued better than average results, the investor must follow policies which are (1) inherently sound and promising, and (2) not popular on Wall Street.
By speculating instead of investing, you lower your own odds of building wealth and raise someone else
An investor calculates what a stock is worth, based on the value of its businesses. A speculator gambles that a stock will go up in price because somebody else will pay even more for it.
People who invest make money for themselves; people who speculate make money for their brokers.
