“An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return." (Benjamin Graham, The Intelligent Investor)
Benjamin Graham is considered to be one of the greatest teachers on investing, and the quote above was his most basic lesson.
It means, quite simply:
(1) When you invest, your first and most important objective is to ensure that the money you put in will probably stay safe.
(2) Only when you have satisfied of objective (1) do you start thinking about whether or not the investment will give you a good return.
Most people (even though some won't admit it) won't follow Ben Graham's `Safety First' investment style; most people prefer to take bigger risks in the hope of even bigger returns. Not me though- I'm Graham through and through. And that goes to the title of this Blog.
The Blog title is inspired by the fable of the Tortoise and the Hare. It is rooted in the truism that in the long run, hard working individuals who save their money by investing in good assets will end up wealthier than higher income persons who save less or who save in lower quality investments.
When investing, I prefer assets that are tortoise-like. Such investments have characteristics that allow them to withstand tough times (such as recessions) but which also deliver attractive returns. And so, when we invest, we dont have to be like stock market traders who have to check their stock prices every few minutes. Our investments should allow us to sleep soundly at night, and at the same time to be confident that we'll achieve quite satisfactory returns.
Just like a smiling tortoise. :)
And that's the thought for today.
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