Why 1925?

The Martin Capital Management Q2 2014 commentary (“Slaying Goliath”) left readers in suspense. It closed with a cliffhanger question … and a promise that it would be answered in the Q3 2014 edition now in your hands or on your screen. The question: Why did the “Dean of Wall Street,” Benjamin Graham, single out 1925 (not the more fortuitous years of 1926–29) in the following quotation from the first edition of The Intelligent Investor published in 1949?

It is worth pointing out that assuredly no more than one out of 100 who stayed in the market after 1925 emerged from it with a net profit and that the speculative losses taken were appalling.

Before attempting to answer the question posed above, we suspect you’ll want to know more about Ben Graham and why you should read what this man from an earlier era had to say. You will no doubt need to be satisfied that he was qualified to pen the words cited above 20 years after the great market crash. To close the link between then and now, let’s reflect on the relevance today of what Graham wrote to investors in 1949.

Read entire essay here: Why 1925?