Sunday, March 3, 2013

Graham and Dodd quote

From Security Analysis, 1940 edition:

"It is customary to refer with great respect to the  “bloodless verdict of the market place,” as though it represented invariably the composite judgment of countless shrewd, informed and calculating minds. Very frequently, however, these appraisals are based on mob  psychology, on faulty reasoning, and on the most superficial examination of inadequate information. The analyst, on his side, is usually unable to apply his technique effectively to correcting or taking advantage of these popular errors, for the reason that surrounding conditions change so rapidly that his own conclusions may become inapplicable before he can profit by them. But in the exceptional case, as illustrated by our last example, the facts and the logic of the case may be sharply enough defined to warrant a high degree of confidence in the practical value of his analysis."