More T. Rowe Price Quotes and Buying and Selling Tips

More T.  Rowe Price Quotes   “The growth stock theory of investing requires patience, but is less stressful than trading, generally has less risk, and reduces brokerage commissions and income taxes.”   “Buy stocks of growing businesses, managed by people of vision, who understand significant social and economic trends and who are preparing for the […]

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Crowd Psychology and Crises

Crowd Psychology and Crises   Edson Gould felt his most important discovery was “the action of the stock market is nothing neither more nor less a manifestation of mass crowd psychology in action.” Gould made his discovery in Gustave Le Bon’s 1895 book, The Crowd: A Study of the Popular Mind Le Bon (1841-1931), a […]

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Joseph Schumpeter – Economist

(Joseph Schumpeter inspired John Burr Williams to write about intrinsic value.)         The central point is that capitalism can only be understood as an evolutionary process of continuous innovation and “creative destruction.”   From Schumpter’s Theory of Economic Development: “Excluding any innovations and innovative activities, we have a stationary start. The hero to the […]

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Four Enduring Takeaways from John Burr Williams

Focus on Dividends, Not Earnings.  The intrinsic value of a company is equal to the present value of its future dividends, not earnings. “Earnings are only a means to an end,” Williams argued, “and the means should not be mistaken for the end.”   Investment versus Speculation.       An investor is “a buyer interested in […]

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Selected material from Searching John B. Williams

Excerpts from The Theory of Investment Value, by          Cornerstone funds blogs April-May, 12014   John Burr Williams’ book, is not about beating the market or getting rich in the market.  It is a wake-up call to the investment elite to offer them a theory of investment value that would encourage more long-term investing and less […]

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Dividend versus Growth

A recent web article compared a total return from 1960 to 1999. A table showed the S&P 500 average annual total return was 12.5% (3.4% in dividends [27.9% of the total] and 9.1% in capital gains). Using the old Dividend-Bond Multiple Rule (via hypothetical market prices based on 120% dividend-bond yield multiples), the annual returns […]

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John Burr Williams The Math Poet

John Burr Williams (JBW) was a security analyst who wanted to learn more about how to estimate fair value. After several years in the job market, he returned to Harvard to learn about economics, with the hope of finding causes for the 1929 stock market crash and the 1930s depression. His Ph.D. was secondary to […]

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The Circus of Global Politics

Diners at the Bizzy Bee were debating world events and March madness when someone mentioned that the circus was coming to town.  Sally suggested they should all watch the world from the perspective of a three-ring circus. Dempster jumped right in, suggesting animals for each ring: tigers in one ring (representing the Pacific Rim), bears […]

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John Bogle – The Man

John Bogle’s heritage is heavily Scottish. John’s maternal grandmother immigrated to America in the 1700s to work in farming.  Bogle’s great-grandfather, Philander Banister Armstrong, was John’s “spiritual progenitor”. Philander worked to reform the fire and life insurance industries. John’s family history may explain his thriftiness and two of his characteristics: “stubbornness of an idealist” and […]

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The Less Stressed Investor

In this issue, we present checklists for new and old investors to help them review their financial and investing game plans to make sure they are not overlooking or forgetting things that make extra profits or lessen losses. Better investors are healthy, have good clear minds and control their emotions and have less stress. Good […]

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