Benjamin Graham - Do not time the market, profit from pricing the market: Part 2

Key takeaways at the end

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There is one aspect of the "timing" philosophy which seems to have escaped everyone's notice. Timing is of great psychological importance to the speculator because he wants to make his profit in a hurry. The idea of waiting a year before his stock moves up is repugnant to him. But a waiting period, as such, is of no consequence to the investor. 

What advantage is there to him in having his money uninvested until he receives some (presumably) trustworthy signal that the time has come to buy? He enjoys an advantage only if by waiting he succeeds in buying later at a sufficiently lower price to offset his loss of dividend income. What this means is that timing is of no real value to the investor unless it coincides with pricing – that is, unless it enables him to repurchase his shares at substantially under his previous selling price. [...]

It is far from certain that the typical investor should regularly hold off buying until low market levels appear, because this may involve a long wait, very likely the loss of income, and the possible missing of investment opportunities. 

On the whole it may be better for the investor to do his stock buying whenever he has money to put in stocks, except when the general market level is much higher than can be justified by well-established standards of value. [...] 

A great deal of brain power goes into this field, and undoubtedly some people can make money by being good stock-market analysts. But it is absurd to think that the general public can ever make money out of market forecasts.

If you, the reader, expect to get rich over the years by following some system or leadership in market forecasting, you must be expecting to try to do what countless others are aiming at, and to be able to do it better than your numerous competitors in the market. There is no basis either in logic or in experience for assuming that any typical or average investor can anticipate market movements more successfully than the general public, of which he is himself a part.

Chapter 8, The Intelligent Investor (1973)

* Bold emphasis added

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Key concepts and takeaways:

• Prioritise pricing over timing: If you are comfortable with the current stock price of your business, do not try to time the market by waiting for example for the next central bank decision about interest rates. Regular investments of smaller amounts over time can help you resist this temptation to time the market.

• Focus on the long-term value: Individual investors should not attempt to profit from short- and near-term market movements as they would be competing with a large number of stock-market traders and first-class financial analysts who are trying to do the same thing. As an individual investor, you do not have any competitive advantage and you need to respect that. All activities that emphasise price movements first and underlying values second, the work of many intelligent minds constantly engaged in this field tends to be self-neutralising and self-defeating over the years.