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Ben Graham lecture series


philassor
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As you probably have noticed a series of some of Ben Graham's lectures are being posted on the gurufocus site by CanadianValue.

 

The featured lecure posted today is about "Valuing Future Earnings":

 

http://www.gurufocus.com/news.php?id=115320

 

There was a lot of debate on this board the last year or so as to wether to commit funds when we did not know wether the market has reached a bottom or not. Here is a quote from Ben extracted from this lecture on this topic.

 

"Our opinion is that for the investor it is better to have his money invested than it is to feel around for the bottom of the securities market. And if you can invest your money under fair conditions, in fact under attractive specific conditions, I think one certainly should do so even if the market should go down further and even if the securities you buy may also go down after you buy them. That is rather a long answer to this question, but it is an interesting one."

 

(note that the question he refers to was based on a Securities Analysis quote: "Judging from observations made over a number of years, it would seem that investment in apparently undervalued common stocks can be carried on with a fair degree of over-all success, provided average alertness and good judgment are used in passing on the future prospect question, and provided also that commitments are avoided at the times when the general market is statistically too high." )

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"There was a lot of debate on this board the last year or so as to wether to commit funds when we did not know wether the market has reached a bottom or not."

 

I am very concious of the fact that after experiencing 2008 and early 2009 that I might forever be fighting yesterday's battle, meaning that I will always be afraid to be fully invested for fear of not having cash to deploy during rampant pessimism.

 

At this point I'm sitting on a lot of cash, and I think there is a good chance that I will always be holding out for another panic that doesn't come in the next 20 years.  The result could very well be a few points off my annual returns.  I do however think having that cash waiting will result in better decision making as a following market will be something to be enjoyed.

 

http://valueinvestorcanada.blogspot.com/

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