What an Investing Legend Would Tell You About Wall Street

Stefan Cheplick
Jul 30, 2017 · 2 min read

Ben Graham published The Intelligent Investor in 1949. It was probably the first book to provide a complete breakdown of investing. It also showed how anyone can get into markets with just a little reading and hard work. Maybe that’s why the book is still so famous today, because the lessons have remained positive and timeless.

I was recently re-reading The Intelligent Investor, looking for anecdotes to remix and build into my own strategy and a certain segment popped out. What I love most about it is that even after 68 years, people to this day still fall for it, watch it, and let it influence their decision-making. It’s even happened to me. What I’m talking about is the Wall Street machine, which publishes research, reports, and insights every hour of every business day. People today are quick to critique the media from fake news to political bias, but in some instances Wall Street “analysts” and “researchers” have an even bigger soap box and are rarely held under similar scrutiny. Graham, Warren Buffett’s mentor, was this woke more than 6 decades ago:

“The farther one gets from Wall Street, the more skepticism one will find, we believe, as to the pretensions of stock market forecasting or timing. The investor can scarcely take seriously the innumerable predictions which appear almost daily and are his for the asking. Yet in many cases he pays attention to them and even acts upon them. Why? Because he has been persuaded that it is important for him to form some opinion of the future course of the stock market, and because he feels that the brokerage or service forecast is at least more dependable than his own.

A great deal of brain power goes into this field, and undoubtedly some people can make money by being good stock market analysts. But it is absurd to think that the general public can ever make money out of market forecasts. For who will buy when the general public, at a given signal, rushes to sell out at a profit? If you, the reader, expect to get rich over the years by following some system or leadership in market forecasting, you must be expecting to try to do what countless others are aiming at, and to be able to do it better than your numerous competitors in the market. There is no basis either in logic or in experience for assuming that any typical or average investor can anticipate market movements more successfully than the general public, of which he is himself a part.”

— Ben Graham, The Intelligent Investor, Page 190, which you purchase on Amazon right here

Stefan Cheplick

Written by

I write about investing and manage my own account. I look for misunderstood companies that can be big long-term winners. Working for @StockTwits last 6+ years.

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