SMALL INVESTORS BEARISH, THEY ARE SELLING ODD-LOTS SHORT In our last edition we cited the following headline of a front-page article of our leading financial journal in June 1962: We must prevent our readers from accepting the common jargon which applies the term "Investor" to anybody and everybody in the stock market. Thus we had then to defend our definition against the charge that it gave too wide scope to the concept of investment. (A leading authority stated flatly that only bonds could be bought for investment. After the great market decline of 1929-1932 all common stocks were widely regarded as speculative by nature.
While we have clung tenaciously to this definition over the ensuing 38 years, it is worthwhile noting the radical changes that have occurred in the use of the term "investor" during this period. Operations not meeting these requirements are speculative." What do we mean by "investor"? Throughout this book the term will be used in contradistinction to "speculator." As far back as 1934, in our textbook Security Analysis, 1 we attempted a precise formulation of the difference between the two, as follows: "An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. In particular we wish to develop at the outset our concept of appropriate portfolio policy for the individual, nonprofessional investor. This chapter will outline the viewpoints that will be set forth in the remainder of the book.
ISBN: 9780060793838 CHAPTER ONE Investment versus Speculation: Results to Be Expected by the Intelligent Investor The Intelligent Investor CD The Classic Text on Value Investing By Benjamin Graham HarperAudio Copyright © 2005 Benjamin Graham All right reserved.
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