Henry Clews lived in the nineteenth and early twentieth centuries and wrote several books on Wall Street. One that I read recently was called "The Wall Street Point of View" and had a few quotes that would seem to be the early nuggets of Value Investing.
"One invariable rule there is...Buy only what you can pay for; buy when cheap and sell when dear. The veriest financial infants can see the force of this."
The above quote is one of the basic tenants of Value Investing - buy when others are selling, and sell when they are buying. He also warns against excessive leverage.
"People have preconceived notions. They are not willing to clear their minds of existing theories and bring themselves down to close dealing with facts.- They are apt to base their conclusions on the opinions of others."
His attempt at the behavioral psychology of the market.
"People are usually unwilling to act on conclusions that conflict with their desires, and that involve the acceptance of immediate losses."
Here he warns about loss aversion, one of the most common investor mistakes, and one that we all have trouble dealing with.
More next Thursday.
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