Temperament of an investor: Timing or Pricing

Stock prices rise and fall, so it is human nature to look for a way to profit from such volatility.

There are two possible ways to do so:

1.  Timing:  To anticipate the rise and fall of the market and of the prices of individual stocks.  To buy or hold when they are expected to rise, and to sell or refrain from buying when they appear to be heading down.

2.  Pricing:  To buy stocks that are priced by the market below their fair value of the underlying business and to sell, or refrain from buying when they are priced above fair value.

Benjamin Graham was convinced that an intelligent investor could profit from focusing on pricing.  He was equally convinced that anyone with their emphasis on timing, in the sense of believing their own (or others') forecasts, would end up as a speculator and be doomed to poor financial results over time.

Despite the wisdom of such convictions, Graham also understood most would not listen.  "As  a matter of business practice, or perhaps of thoroughgoing conviction, the stock brokers and the investment services seem wedded to the principle that both investors and speculators in common stocks should devote careful attention to market forecasts."