"...short run the stock market is a voting-machine." That was supposedly said by Professor Ben Graham, Buffett's mentor
--- "There is a debate about the origination of this quote. Warren Buffet claims that his mentor Benjamin Graham once wrote this. However, the quote can’t be found in Graham’s two investing masterpieces Security Analysis or The Intelligent Investor.
Buffett claims Graham used to say this in his classroom (of which Buffett was a student). A similar quote can be found (from Buffett in reference to what Graham said) in the 1993 Berkshire Hathaway shareholder letter,
In the short-run, the market is a voting machine – reflecting a voter-registration test that requires only money, not intelligence or emotional stability – but in the long-run, the market is a weighing machine.
Regardless of the exact origination, the quote is brilliant and it is just as relevant today as it was back then – market prices represent (an often irrational) short-term popularity contest similar to voting for a political election, but in the long run they tend to gain in value due to return on capital, economic growth, and inflation (and for individual investors, dividends paid) – similar to a weighing machine.
It’s a quote that can be referred back to in turbulent times to help ease your mind as everyone else is panicking (passive index investing can help with that too)."
"Coke went public in 1919 at $40 per-share. By the end of 1920 the market, coldly reevaluating Coke's future prospects, had battered the stock down by more than 50%, to $19.50. At yearend 1993, that single share, with dividends reinvested, was worth more than $2.1 million. As Ben Graham said: "In the short-run, the market is a voting machine - reflecting a voter-registration test that requires only money, not intelligence or emotional stability - but in the long- run, the market is a weighing machine."
News 
Market Data 
Discover 
AI
