The Intelligent Investor: What is Warren Buffett Buying?

Mr. Market, the imaginary investor in Ben Graham’s book, The Intelligent Investor, is willing to constantly buy or sell a stock based on whether it has recently gone up or down. Yet, these actions are based on the emotion of recent events, and not on sound investing principles. Ben Graham’s most famous student, Warren Buffett, understands the importance of keeping his emotions in check and during the 3rd quarter when Mr. Market was overly optimistic, Warren chose to “be fearful when others are greedy”.

As we previously stated in our prior blog post, The Intelligent Investor, Ben Graham said, “The typical experience of the speculator is one of temporary profit and ultimate loss”. These manic-depressive investors (aka Mr. Market) will eventually learn some very old lessons.

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