A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing (Twelfth Edition)

investing as a method of purchasing assets to gain profit in the form of reasonably predictable income (dividends, interest, or rentals) and/or appreciation over the long term.

Corollary to Rule 1: A rational investor should be willing to pay a higher price for a share the longer an extraordinary growth rate is expected to last.

the wisdom of Benjamin Graham, author of Security Analysis, who wrote that in the final analysis the stock market is not a voting mechanism but a weighing mechanism.

Determinant 2: The expected dividend payout. The amount of dividends you receive—as contrasted to their growth rate—is readily understandable as being an important factor in determining a stock’s price.

The firm-foundation theory argues that each investment instrument, be it a common stock or a piece of real estate, has a firm anchor of something called intrinsic value, which can be determined by careful analysis of present conditions and future prospects.

First, it is a medium of exchange.

History, in this instance, does teach a lesson: Although the castle-in-the-air theory can well explain such speculative binges, outguessing the reactions of a fickle crowd is a most dangerous game.

Second, money is a unit of account, the yardstick that is needed to post prices and record debts now and in the future.

the definition of the time period for the investment return and the predictability of the returns that often distinguish an investment from a speculation.