Knowing what [effect] is happening in your investment program is not as important as knowing why [cause] it is happening.
History tells us that markets are driven by emotions (psychology) in the short term and economics in the long term, and that most market participants pay more attention to prices than they do to values.
‘Why?’ is the question that guides success.
Speculators are price-driven
Investors are value and growth-driven
We commonly use the teachings of history’s best investors in our decision-making.
Value investing pioneer
In the short run, the stock market is a voting machine [popularity], but in the long run it is a weighing machine [economics].
Growth investing pioneer
Invest in businesses that have disciplined plans for achieving dramatic long-range growth.
Graham and Fisher’s protege
Time is the friend of the wonderful business, the enemy of the mediocre one.
Favorite investing practices
Our goal is to own the best businesses and the mutual funds that own the best businesses.