Timing and advices

Much as the investor would like to be able to buy at just the right time and to sell out when
prices are about to fall, experience shows that he is not likely to be brilliantly
successful in such efforts and that by injecting the trading element
into his investment operations he will disrupt the income return on his
capital and inevitably shift his interest into speculative directions.

  It is not clear as yet whether or not advice on a fee basis will work out
satisfactorily in the field of standard high-grade investments, because of
their relatively small income return. In the purely speculative field the
objection to paying for advice is that if the adviser knew whereof he spoke
he would not need to bother with a consultant’s duties. It may be that the
profession of adviser on securities will find its most practicable field
in the intermediate region, where the adviser will deal with problems arising
from depreciated investments, and where he will propose advantageous
exchanges and recommend bargain issues selling considerably
below their intrinsic value.

 

                    — Security Analysis