A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing (Twelfth Edition)

The key to investing is not how much an industry will affect society or even how much it will grow, but rather its ability to make and sustain profits. And history tells us that eventually all excessively exuberant markets succumb to the laws of gravity.

Technical analysis is the method of predicting the appropriate time to buy or sell a stock used by those believing in the castle-in-the-air view of stock pricing. Fundamental analysis is the technique of applying the tenets of the firm-foundation theory to the selection of individual stocks.

“In crowds it is stupidity and not mother-wit that is accumulated,” Gustave Le Bon noted in his 1895 classic on crowd psychology.

Third, money is a store of value.

The fundamentalist uses four basic determinants to help estimate the proper value for any stock. Determinant 1: The expected growth rate.

the wisdom of Benjamin Graham, author of Security Analysis, who wrote that in the final analysis the stock market is not a voting mechanism but a weighing mechanism.

The key to investing is not how much an industry will affect society or even how much it will grow, but rather its ability to make and sustain profits.

successful investor is generally a well-rounded individual who puts a natural curiosity and an intellectual interest to work.

Rule 3: Look for stocks whose stories of anticipated growth are of the kind on which investors can build castles in the air.