Last week, I posted on Henry Clews and a book he wrote called "The Wall Street Point of View." He would appear to be one of the earliest Value Investors. Here are some quotes that struck me while reading.
"How is a person to be absolutely certain that a given stock is cheap or dear at a given time ? You say, by comparison ? But if he compares the price with what it was at any past period, he must also be able to state all the facts that existed at that period having any bearing on this stock."
Beware a Value trap. Cheap doesn't mean buy it without thinking.
"After a careful and exhaustive search into all the materials at hand, he buys shares at, say, 60 per cent. of par, as being cheap at the price, and really worth more money, and next day they may be offered at 50. He then has really lost $10 on each share; but if he holds the purchase, and it ultimately advances to par, he has gained $40 per share."
Be a long term investor
"The careless and superficial public, coming in too late as bulls, found themselves at last compelled to become unwilling sellers at greater or less losses, in some cases so severe as to shatter households and drive citizens to ruin."
Beware momentum investing, or the greater fool theory.
"Thus the person who studies real values must not be content with that alone. He must also study the facts that in times of stress and storm make real values fluctuate as wildly in manner, if not in amount, as those of the most fanciful securities.."
Take advantage of other investors who panic.
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