Business Valuations versus Stock-Market Valuations: The True Investor

1. The true investor is in a special position when he owns a listed common stock.
2. He can take advantage of the daily market price or leave it alone, as dictated by his own judgement and inclination.
3. He must take cognizance of important price movements, for otherwise his judgment will have nothing to work on.
4. Conceivably they may give him a warning signal which he will do well to heed - this in plain English means that he is to sell his shares because the prices has gone down, foreboding worse things to come.
5. In our view such signals are misleading at least as often as they are helpful.
6. Basically, price fluctuations have only one significant meaning for the true investor.
7. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal.
8. At other times he will do better if he forgets about the stock market and pays attention to his dividend returns and to the operating results of his companies.

Ref: Intelligent Investor by Benjamin Graham