BenjaminGraham.jpgStock Market guru Benjamin Graham:

Mathematics is ordinarily considered as producing precise and dependable results; but in the stock market the more elaborate and abstruse the mathematics the more uncertain and speculative are the conclusions we draw there from.

In forty-four years of Wall Street experience and study I have never seen dependable calculations made about common stock values, or related investment policies that went beyond simple arithmetic or the most elementary algebra.

Whenever calculus is brought in, or higher algebra, you could take it as a warning that the operator was trying to substitute theory for experience, and usually also to give to speculation the deceptive guise of investment.

He wrote that in 1959. Maybe if he'd had the good sense to write it in 2003, someone would have listened. Instead, he selfishly said a relevant thing long enough ago that modern, informed types were able to disregard his advice as dated. Jerk.

As example: The formula that ate Wall Street.