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Pastimes : John Dessauer's Investors World

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To: Wren who wrote (1918)	12/5/1998 9:21:00 AM
From: Wren	Read Replies (1) of 2346

Bill Fleckenstein recently made a speech which is reproduced on the Stocksite web page. In discussing the extremely high P/Es, etc now in the market, he quotes extensively from Benjamin Graham's 1934 book Security Analysis. A chapter of that book, New Era of Investing, discusses what happened in the market in 1927-29. In short, Graham said that fundamental analysis was abandoned because of two changes in thinking: 1. The trend of earnings was given central importance, and 2. People began to believe that common stocks were the most profitable and therefore best long term investment. The Graham quote that reminded me of JD is: "It was only necessary to buy "good" stocks, regardless of price, and then let nature take her upward course." I know that I experienced some of that when JD first recommended CLB. He recommended it at the high, and I bought his line of reasoning and bought some. I agree that it is a "fine" company, and someday I hope to be back to even, and then make a profit on it. But in hindsight, the European market was certainly in a bubble top about that time and a very experienced investment advisor should have issued a buy with the proviso that it should be bought on dips. stocksite.com

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