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 … Read more
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 … Read more
Corporations with common stocks first appeared in the early seventeenth century when monarchs approved them for trade, exploration and colonization purposes. Stocks were first used by speculators but over time, they became accepted as investments. Speculation returned again and stocks fell out of favor by many people.
The East India … Read more
(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 … Read more
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.”
An investor is … Read more
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 … Read more
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 … Read more
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