Over the years, NAIC's monthly publication Better Investing introduced me to some classic books about investing, including The Intelligent Investor by Benjamin Graham and Security Analysis, by Graham and David Dodd. The principles in these books helped me formulate some common sense ideas about stock valuation. The general public talks up stocks during a bull market, creating peer pressure to "get in the market." The public talks down stocks during a bear market, creating peer pressure to "get out of the market." These swings have been enhanced by the proliferation of media outlets now covering the stock market. The news media tends to focus on the latest trend or "hot idea," much of it directed to market-timing.
Value investors like Benjamin Graham look beyond the hype for bargains, or at least reasonable prices. Warren Buffett has practiced Graham's principles to great effect. These two people have given us a legacy of common sense and practical judgment about stocks. Buying a stock is buying into a company. When I'm tempted to follow the latest fad or the most recent hot tip, my judgment is tempered by the principles these investors have practiced.
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