I discovered an interesting video from the 1950’s yesterday. See It Now was a documentary series broadcast by CBS from 1951-1958 with host Edward Murrow. This particular program focused on the stock market and featured a classroom Q&A at Columbia University with Professor Benjamin Graham. Graham, often called “the father of value investing”, is best known as Warren Buffet’s mentor and author of the book, The Intelligent Investor. I have transcribed the three quotes that I found most interesting below in case you are not interested in watching 1950’s black and white programming hosted by a man with a cigarette in hand and interrupted by commercials from The Aluminum Company of America.
Benjamin Graham on dollar cost averaging (the strategy of investing a set amount of money in an asset at regular time intervals to neutralize short-term fluctuations in the price, a strategy which I am presently employing with Bitcoin and would consider for stock purchasing in the future):
“I think there’s no doubt accepting your premise that a man who would put the same amount of money in the market year after year for the next 20 years let’s say has a very good chance of coming out ahead regardless of when he begins and particularly regardless of whether he should begin now. You have to allow for the human nature factor that no man can really say definitely just how he is going to behave over the next 10 or 20 years and there is danger that people who start with the idea of being systematic investors over the next 10 or 20 years may change their attitude as the market fluctuates and, in the first instance, put more money into the market because they become speculators, and secondly, get disgusted and scared and don’t buy at all later on when prices get low. It’s a psychological danger. The fault is not in the stars or the system but in ourselves I think.”
Benjamin Graham on why the predictions of Wall Street experts are not more dependable:
“Everybody on Wall Street is so smart that their brilliance offsets each other, and that whatever they know is already reflected in the level of the stock prices pretty much and consequently what happens in the future represents what they don’t know.”
Edward Murrow in closing the program:
“[The stock exchange] remains the subject of curiosity and concern as to whether what is good for the exchange is good for the country and the people who live here. There have been no official charges that it has been rigged or manipulated but rather the question of whether or not the market is healthy. There is wide disagreement amongst the experts as to why the market behaves as it does but there is considerable agreement that it behaves the way it does because people behave the way they do. Good night and good luck.”