Born in 1894, Graham, author of the Intelligent Investor worked in managerial economics and investing which led to value investing within mutual funds, hedge funds, diversified holding companies. Throughout his career, Graham had many notable disciples who went on to receive substantial success in the world of investment, including Warren Buffett who described him as “the most influential person in his life after my own father” – Robert Zurrer for Money Talks

Of all the well-known investors out there today, none has a reputation that comes anywhere near that of Benjamin Graham. Even though this godfather of investing has been dead for many years, he still shapes the investment ideas and styles of thousands of investors alive today thanks to his timeless advice.

Indeed, despite the fact that the financial world has changed tremendously since Graham’s death, his advice is still highly relevant as, as he once said, “The underlying principles of sound investment should not alter from decade to decade, but the application of these principles must be adapted to significant changes in the financial mechanisms and climate.”

Below I’ve gathered some more quotes from Graham, which provide an insight into his way of thinking, and when taken together, offer a sort of guide for investors of all experiences on how to invest and think about the markets. I guarantee you’ll take something away from the below. Even if you’ve been an investor for many decades, it’s always sensible to remind yourself of the principles of sound investment, so you don’t stray into bad habits.

Benjamin Graham’s timeless advice 

“The individual investor should act consistently as an investor and not as a speculator. This means… that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money’s worth for his purchase.”

“The stock investor is neither right or wrong because others agreed or disagreed with him; he is right because his facts and

analysis are right.”

 

“The investor’s chief problem and even his worst enemy is likely to be himself.”

This was the single most important quote Graham has issued. It’s so important that every investor understands her weaknesses and her place in the world. You are not going to be the next Warren Buffett (Trades, Portfolio), so don’t try to be. Understand your drawbacks and invest accordingly. If you don’t, and you overtrade, invest in something you don’t understand or try to be clever, the results can be disastrous. As Charlie Munger (Trades, Portfolio) once said, “It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.”

Back to Graham’s timeless advice:

“Basically, price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal. 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.”

“The most realistic distinction between the investor and the speculator is found in their attitude toward stock-market movements. The speculator’s primary interest lies in anticipating and profiting from market fluctuations. The investor’s primary interest lies in acquiring and holding suitable securities at suitable prices. Market movements are important to him in a practical sense because they alternately create low price levels at which he would be wise to buy and high price levels at which he certainly should refrain from buying and probably would be wise to sell.”

“Mr. Market’s job is to provide you with prices; your job is to decide whether it is to your advantage to act on them. You do not have to trade with him just because he constantly begs you to.”

“The best way to measure your investing success is not by whether you’re beating the market but by whether you have put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.”

“Losing some money is an inevitable part of investing, and there’s nothing you can do to prevent it. But to be an intelligent investor, you must take responsibility for ensuring that you never lose most or all of your money.”

also:

Warren Buffett Recent Buys

Warren Buffett’s Current Portfolio

This Powerful Chart Made Peter Lynch 29% A Year For 13 Years

Over a week ago, in my analysis to my members, I noted that, ideally, I was looking for the market to pullback and test the 2800SPX region. And, the market certainly dropped down to the 2800 region, but also broke the 2796SPX support upon which I was focused. That had me begin to focus on the 2700SPX region of support. And, today, we dropped and broke my next level of support at 2700SPX. But, this is the pullback I have been looking for over the last several months which had not materialized. Now, it has come in with a bang.

While this pullback took many by surprise, the common reason attributed to the decline last week was the rise in interest rates. I need help understanding this “reason.” Allow me to explain.

Back on June 27^th, 2016, we published analysis to our members entitled “Beware of Bonds Blowing Up.” That was the first long term top call we made on bonds in the 5 years we had been open to that point. And, as we now know, the bond market topped a little less than two weeks later. 

So, since July of 2016, rates have been rising. Most interestingly, the heart of the strongest segment of the drop in the bond market in 2016 coincided with the bottoming of the equity market at the time of the election, which began an extraordinarily strong rally in the equity market. Therefore, it is quite clear that the market rallied quite strongly while rates were rallying strongly at the same time.

Today, with the market dropping even stronger than last week, rates went down. Now, isn’t that a head scratcher?

So, shall we now review the common reason we read about the “cause” of the decline in the stock market last week? When we shine the light of facts on these reasons, do they really hold water? Of course not. Yet, that does not stop almost every analyst and their mother from making their specious claims.

Do you know why they make these claims? It is because they see the market dropping, and then look for what else is happening at the same time for what they can blame as the obvious cause. First, they saw good jobs numbers Friday morning, so that clearly cannot be the reason for the market dropping almost 2%. Then, they see rates rising on the same day, so they assume that this must be the cause since there is no other reason they can come up with. In truth, one could claim that the drop was due to the good jobs report, and it would make just as much as sense as blaming it on the rise in rates.

And, if rates were not rising, I can assure you they would have blamed the decline on Friday to the release of the Congressional memo (and I even heard some make this ridiculous claim). Maybe they will now claim that the drop was due to the release of the GOP memo, and then we rally when the Dems release their Memo?

In fact, why not claim that today’s drop was due to the Eagles win? 

Is this really an intellectually honest way to analyze the markets? Clearly, it is not. So, how accurate do you think prognostication can be based upon the common manner in which these people view the market? Yet, this is what you look to read day in and day out to make your assessment about market direction?

Now, don’t get me wrong. I clearly missed the market’s direct move to 2800SPX this early in the cycle, as I did not expect us to strike 2800 until the end of 2018. Rather, I expected we would only reach 2611SPX from the 1800 region based upon my market call back in 2015, after which I expected a pullback before we head up to the 2800+ region. However, because I miss an extension which resides in the category of a probabilistic anomaly does not suggest that the methodology I use is intellectually dishonest. Yet, I think it is quite clear that these common perspectives on what moves the market is clearly intellectually dishonest.

Now, when the market provides us with an upside move which is a statistical anomaly, it puts itself in a very dangerous posture. And, today, we saw the result of the unwinding of that dangerous posture. In fact, we saw another statistic anomaly, but on the way down.

I am certain you will now hear constant talk about how this is the end to the bull market. But, I think the probability of that potential is still quite low. Rather, this is the wave (4) pullback for which I have been awaiting. And, as you saw in my last article on the market, I provided you with a chart showing that we were completing wave (3) of v of 3 off the 2009 lows. That meant we were expecting a wave (4) to be overdue. As you can see on my attached chart updated below, we are looking for the market to hold support between 2424-2539SPX, and then start a rally into year end which will target at least the 3011 region, but with strong potential to extend to the 3223SPX region.

So, while you will undoubtedly hear about how this bull market has now come to an end, I am still thinking we are going to set up another rally over 3000 into the end of the year. But, once we complete this next rally, that will likely set us up for a 20% (maybe more) correction taking us into 2019.

See chart illustrating the wave counts on the S&P 500.

Avi Gilburt is a widely followed Elliott Wave technical analyst and author of ElliottWaveTrader.net (www.elliottwavetrader.net), a live Trading Room featuring his intraday market analysis (including emini S&P 500, metals, oil, USD & VXX), interactive member-analyst forum, and detailed library of Elliott Wave education.

In this past weekend’s missive, I discussed the recent market sell-off:

“Well, this past week, the market tripped ‘over its own feet’ after prices had created a massive extension above the 50-dma as shown below.  As I have previously warned, since that extension was so large, a correction just back to the moving average at this point will require nearly a -6% decline.”

Chart updated through Monday

…..continue reading HERE

With the rally continuing to power higher in the stock markets I’m going to update the portfolio combo charts so you can see how this once is a lifetime rally in unfolding. When this impulse move finally burns itself out we will get a decent sized correction that may take a year or two build out. Until then the hardest thing for most investors riding this bull is to hang on for dear life.

For over six months or longer we’ve heard the never ending story about how overbought this market is, but the stock market doesn’t care what we think. The investors that have missed this rally are crying the loudest that the stock market has to crash because they’re not in it, if they were they would be enjoying the ride of a lifetime. At any rate the correction is going to come at some point and I can guarantee you that we won’t hit the absolute top tick. We have some price objectives that hopefully will get us out in time to enjoy our profits.

I’m going to start off by looking at the daily stock market combo chart. When looking at all the combo charts to follow note the two dominate chart patterns, the H&S’s and the rising flags and wedges. So far there is nothing on these charts that are suggesting a top is in.”

Click on chart 2X

“I would like to reiterate once more that our current rally is not normal and doesn’t happen very often in ones trading career. To have missed this opportunity because of emotions, trading discipline or trying to use fundamentals that tell you how the markets are supposed to work, is tough when you see a market like we have right now leaving you behind. More than anything else it is psychological warfare. If it was easy then everyone would become millionaires and we know the markets don’t work that way.

I’ve stated many times in the past that we are going up against all the best minds in the world that want every penny you have. They could care less how you feel as long as they get your hard earned capital. It’s a dog eat dog world and to the victor goes the spoils. Have a great weekend. All the best

…Rambus

https://rambus1.com/

The charming mysticism of precious stones is the stuff of legend, and today, these ‘tears of the gods’ are opening up major new opportunities for investors.

Now estimated to be worth north of $100 billion, the gemstone industry is growing in leaps and bounds, with analysts projecting that demand for diamonds and gemstones will continue to outstrip supply.

A lack of new discoveries, a growing inclination towards branded ornaments, a plunging dollar and ease of access thanks to online shopping have combined to make this one of the hottest markets of the year.

While diamonds have led the gemstone surge in recent decades, it’s emeralds, rubies and saphires that are poised to boom, with Technaviot predicting that the global gems and jewelry market will reach $292 billion by the end of 2019.

One only needs to look at the prices of colored gemstones today to see where this market is going.

A 5-carat sapphire that was sold for $10,000 in 1965 fetched $1,000,000 at a recent auction.

– In June 2017, the famous Rockefeller Emerald sold for an eye-watering $5.5 million, making it the most expensive emerald – per carat – ever sold at auction.

– An 8.62 carat unheated Burmese Ruby sold for $3.62 million at Christie’s in 2006, setting a new world record of $420,000 per carat for unheated ruby.

Prices of diamonds vs. colored gemstones are traveling on opposite trajectories right now, with diamonds in a years’-long slump and rubies and emeralds on the rise. 

But that’s only one part of the reason why colored gemstones are rapidly becoming 2018’s hottest investment.

They belong to a unique asset class that shows no correlation to other asset classes such as gold, commodities and real estate. The high resilience to macroeconomic shocks offers a great way for investors to hedge against the downward risks inherent in traditional equity markets.

The gemstone market is booming, and these 5 stocks have their finger on the pulse of this colorful revolution:

#1 Sotheby’s (NYSE:BID)

At a market cap of $2.7 billion and a trailing 12-month revenue of $886.5 million, Sotheby’s is one of the largest high-end art and jewelry auctioneers around.

It’s ‘Magnificent Jewels’ auction in New York in December raked in almost $54 million, with these headliners:

(Click to enlarge)

After a revenue slump in 2016, Sotheby’s has been enjoying a nice recovery with topline growth clocking in at an impressive 87 percent during Q3 FY17.

The company announced in December that its popular ‘A Life of Luxury’ series managed sales of $117.3M across six auctions, with 85.2 percent of lots sold. More than half of those sales surpassed the higher end of their estimates, so it seems as if the strong momentum is carrying on.

Overseas buyers have been feeling particularly frisky due to a weaker dollar which gives them more purchasing power. The greenback is going through another rough start to the year, and 2018 might turn out to be another record year for Sotheby’s.

#2 Fura Gems Inc. (TSX.V:FURA)

This is the most exciting company in this space because it’s sitting on arguably the most famous emerald mine in the world in Colombia, and four ruby licenses in Mozambique—the new hot spot for rubies.

Its new Colombia mine—Coscuez–is home to one of the biggest emeralds the world has ever seen, a 1.759-carat emerald that the Banco de la Republica of Colombia has deemed priceless.

Even better: This mine has only been 10 percent excavated, so Fura has acquired the raging bull of emeralds in a country that is the emerald capital of the world.

What it hasn’t had until now is a team of professionals to mine it.

Another find like this record-breaking emerald in Colombia could put Fura on the front page of every news outlet in the world.

And then there’s Mozambique … the world’s largest supplier of rubies by volume. It’s about to get even bigger because it will fill in the gap left behind by falling supplies from Burma (Myanmar), whose human rights issues are scaring away investors and buyers alike.

Here, Fura has acquired exclusive rights to the most sought-after gemstone deposits with four licenses for deposits at shallow depths. It has an 80 percent stake covering almost 400 square kilometers.

Larger Image

Sweetening the deal is the fact that Fura does something few know how to do: Employ a rare process of heating and treatment for rubies that turns lower-quality rubies into high-quality gemstones for the market.

And just like in Colombia, the ruby market of Mozambique lacks capital and structure, and Fura is poised to systemitize it all.

There has only been one company—until now—in the Mozambique ruby market, and that is Gemfields. The rest has been fractured and disorganized. But Fura is going to change that using a “diamond action plan” for colored gemstones.

De Beers turned diamonds into a massive $80-billion industry. Gemfields has shown us the beginning of what’s possible in the colored gemstone industry. And the same man behind two huge Gemfields discoveries and its $1-billion ruby mine valuation is the CEO of Fura, Dev Shetty.

The company is backed by heavy hitters at Forbes & Manhattan, a highly successful resource-focused merchant banking group famed for its wild success in locating undervalued assets, developing them, and selling them for huge profits. It acquired Consolidated Thompson’s assets for $0.22 and sold them for $17.25, for instance.

Fura is kicking off full production in less than a year, while revenues are expected six months later. With potential underground precious gemstone assets that are much larger than its current $52.3-million market cap, Fura Gems offers early-in investors a rare opportunity for strong capital appreciation from early-stage investments in a highly disruptive and exclusive resource sector.

#3 Rio Tinto Plc (NYSE:RIO)

This Australian-British mining giant awed the colored gemstone industry this summer, when it revealed, in New York City, the largest Fancy Red diamond in the history of its Argyle Pink Diamonds Tender. The 2.11-carat polished, radiant cut diamond—The Argyle Everglow™–is a feather in this miner’s cap. And it’s on trend with consumers’ desire for color.

RIO is one of the top five largest independent diamond producers in the world. Its stock has been on the mend since early 2016 and has rallied strongly after the hammering it received post the 2011 commodities peak. The stock has rallied nearly 40 percent over the past 12 months, and the current bull market in metals and precious stones has only just started…

Being a large diversified mining company, diamond production is just one of RIO’s activities.

Rio boasts impressive growth assets that can continue to support earnings growth for many years to come. Currently the biggest of these is Silvergrass, whose primary product is iron ore. The project has the potential for more than 20 million tons/annum, good for nearly $1.6 billion in revenue at current prices of $77/ton. Silvergrass boasts an impressive Internal Rate of Return (IRR) in excess of 100 percent. Meanwhile, capex for the project is low at around $0.5 billion per quarter.

Rio also owns Amrun and Oyu Tolgoi projects, charged with the production of seaborne bauxite and high-quality copper, respectively. These two projects are probably responsible for driving most of the current investor enthusiasm on RIO stock. Both are big projects with annual capex exceeding $20 billion. Aluminum and copper prices have been climbing sharply, and are expected to remain elevated amid robust global demand.

#4 Tiffany & Co. (NYSE:TIF)

Tiffany is one of the largest and oldest jewelry companies with more than 100 international locations. In fact, Tiffany is credited with developing the carat as a weight standard for gems.

TIF has a new CEO, Alessandro Bogliolo, who is pushing his team hard to not only exceed investor expectations but also to outperform its competitors.

The stock had two upgrades in December, as analysts eye improved performance.

CitiBank upgraded TIF because it sees luxury goods businesses growing their sales by about 6 percent industrywide over the next few years, with profits growing at about 10 percent. It has pegged Tiffany’s as one of the leaders.

Arguably, TIF has done a lot to improve top and bottom-line performance in the long run. It has leveraged capital investments from the past few years in distribution, manufacturing and diamond-sourcing processes.

#5 Signet Group Plc (NYSE:SIG)

Signet Group is the world’s largest retailer of diamond jewelry. Unlike high-end players such as Sotheby’s, Signet specializes in the middle-tier market and owns several brands, including Kay Jewelers, Zales and Jared.

SIG stock has endured a tough period that saw the valuation of its shares cut nearly by half due to lackluster growth. The company’s transition to a non-bank lender rather than a pure-play jewelry has also been taking a toll due to high delinquency rates.

But at the current fair valuation, the stock might be a decent pick for value investors. It’s really trading at a discount amid all the negative publicity over a technically disastrous in-house credit portfolio and credit practices problems, but it’s under new leadership now and we see a new strategic focus, more stability and a new acquisition of an online diamond retailer.

Honorable mentions:

First Majestic Silver (NYSE:AG): There’s a lot of bullishness around this stock, with earnings growth expected to be high over the next 3-5 years. The optimism is absolutely justified as this Canadian mining company has been operating in Mexico for nearly a decade and has over $770 million in assets including 5 of the most promising locations in the country.

By. Charles Kennedy

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Forward-Looking Statements

This news release contains forward-looking information which is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ from those projected in the forward-looking statements.  Forward looking statements in this release include that Fura’s property can achieve mining success for quality gemstones; that the gems when produced will be high quality; that tastes will move away from diamonds to colored gems;  that Fura will be able to increase production through modern methods and increase the value of its assets through branding and auction sales; and that Fura will be able to carry out its expansion and other business plans. These forward-looking statements are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information.  Risks that could change or prevent these statements from coming to fruition include that the Company may not be able to finance its acquisitions, expansion or other business plans, aspects or all of the properties’ development may not be successful, mining of the gems may not be cost effective, changing costs for mining and processing; increased capital costs; marketing plans may not work out as well as expected; the timing and content of work programs may change; geological interpretations and technological results based on current data that may change with more detailed information or testing; potential process methods and mineral recoveries assumptions based on limited test work with further work may not be viable; additional high value gem properties may not be available for Fura to acquire, or Fura may not be able to afford them; competitors may offer better quality or better marketing strategies; the availability of  labour, equipment and markets for the products produced; and despite the current expected viability of its projects, that the gems cannot be economically produced on its properties, or that the required permits to build and operate the envisaged mines cannot be obtained. The forward-looking information contained herein is given as of the date hereof and the Company assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.

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