By Matthew Makowski There are two types of stocks. On the one hand you’ve got investment-grade stocks. On the other are speculative stocks. And there’s a big difference between an investor and a speculator.
In his foundational work on value investing, Security Analysis, Benjamin Graham wrote:
“An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return.”
Anything not meeting this amounts to buying speculative stocks. Now, Graham knew a thing or two about investing. He’s the father of fundamental analysis. His disciples included the likes of Irving Kahn, Sir John Templeton and Warren Buffett. He also managed to make …read more
