Charles Dow Quotes Page 2

“The great fortunes in stocks have not usually been made by people who give stop loss orders.”

“The man who begins to speculate in stocks with the intention of making a fortune usually goes broke, whereas the man who trades with a view of getting good interest on his money sometimes gets rich.”

“The maxim ‘buy cheap and sell dear’ is as old as speculation itself, but leaves unsolved the question of when a security or a commodity is cheap and when it is dear, and this is the vital point.”

“The maxim ‘let your profits run, but cut your losses short’ has received the approval of most of the great stock operators. The authorship of the maxim has been credit to a dozen people, and most of them would have been willing to father it…”

“The more they actually know, the less confident they become.”

“The one fact pertaining to all conditions is that they will change.”

“The operator should take in a great stock of patience. He will see other stocks go up and his stock stand still. He will see and hear daily that something else is making riches for traders, but he must shut his ears to these statements, even if they are right as far as fluctuations go. He must just sit on his stock, which is intrinsically below its value, until other people observe that it is selling too low and begin to buy it.”

“The outside trader should not attempt to deal in more than two or three stocks at a time.”

“The present is always tending toward the future and there are always in existing conditions signals of danger or encouragement for those who read with care.”

“The public as a whole does not like short selling.”

“The public, as a whole, buys at the wrong time and sells at the wrong time. The average operator, when he sees two or three points profit, takes it; but, if a stock goes against him two or three points, he holds on waiting for the price to recover, with oftentimes, the result of seeing a loss of two or three points run into a loss of ten points.”

“The stop order is the friend of the active speculator, who wants to make a quick dash for a large profit and who is willing to make small losses in the hope of getting a good run once in four or five attempts.”

“The tendency with most people holding a stock which does not move for a time is to sell the stock about as soon as it begins to move, through fear that it will again become dull. This is just the time not to sell, but if anything, to buy more on the idea that other people have discovered that the price is below value.”

“There are usually more rallies in a bear market than there are relapses in a bull market.”

“This rule… to cut losses short but let profits run. It sounds very easy to follow, but is in reality difficult to observe.”

“To know values is to know the meaning of the market. And values, when applied to stocks, are determined in the end by the dividend yield.”

“Value is determined by the margin of safety over dividends, the size and tendency or earnings; the soundness of the balance sheet and of operating methods, and general prospects for the future. This sounds rather complicated, but is not especially difficult to work out.”

“Value will always work out in the course of time.”

“Values are determined roughly by the earnings available for dividends.”

“When the price of a stock declines considerably, the small operator always fears that he has overlooked something of importance, and he is therefore tempted to sell instead of averaging his holdings.”