Ben Graham stated that "if you want to make money on Wall Street, you must have...

Ben Graham stated that "if you want to make money on Wall Street, you must have the proper psychological attitude." Quoting the philosopher, Spinoza, Graham said "you must look at things in the aspect of eternity". What does this mean? How did this change Warren Buffet's life and the trajectory of investor psychology? And does this investment guidance hold true given the unprecedented swings in the stock market today?

Expert Solution

The psychology of investor is very important when he is investing into the share market because it is highly volatile and it can change the prospective of investment very quickly so the investors must be very disciplined and he must be aware about every events related to the market as well as his stocks so he can take decisions proactively and he can always follow the due course of action in order to maximize his overall rate of return into the market.

Warren Buffett is always known for sticking to his investment in adverse scenarios and not investing by following the herd and he is always sticking to his own fundamental analysis even at the time of adverse crisis and even if the company is losing bad, but he believes his strategy and he is investing in the long run to come out at the top.

His investment in various companies can be very good example of investor psychology as he had invested when there was complete pessimism in the market and blood on the street so he didn't lose his mind and infact focus on the due course of investment by buying the shares at the cheap price and holding it for the longer time frame to maximize his rate of return.

Investors should always be looking at cutting all the noise across him and he should always not get affected by others analysis and he should follow his due course of action and fundamental analysis to hold onto his investment through sceptical approach and maintain the the investor psychology.

jeff jeffy answered 1 year ago

You have made a fortune in Wall Street. The IRS is suspicious and you must launder...

You have made a fortune in Wall Street. The IRS is suspicious and you must launder the money. You have D dollars and you are considering all the different ways you can divide this amount (in integer values) to n different criminal groups. Each group can take up to ai dollars without alerting the IRS. You also have D <=a1 + a2 + .. + an. Using bottom-up dynamic programing, write pseudo-code to determine how many different ways you can...

You want to reduce text communication with your corrupt friends in Wall Street. You suggest using...

You want to reduce text communication with your corrupt friends in Wall Street. You suggest using Huffman coding to reduce the number of bits in communication. You look over your previous 100 words of texts. You find the following words and their number of occurrence in parenthesis: SELL (12), BUY (8), MOVE (19), HIDE (42), STOP (2) and WATCH (17). This frequency is consistent over all your messages. (a) What codewords do you recommend for each word? (b) Whit these...

You have corrupt friends in Wall Street that supply you with the following information: the stock...

You have corrupt friends in Wall Street that supply you with the following information: the stock price of ten fraudulent companies every month for a year. You have access to the data for the entire year in advance. You would like to use this information to get as rich as possible by the end of the year. At the start of every month k, you look at the table S[i,k], which gives you the average return on on a $1...

Describe the history and current issues facing Wall Street. What did you learn about Wall Street...

Describe the history and current issues facing Wall Street. What did you learn about Wall Street that surprised you? What questions do you still have?

What do you think of Wall Street (or any financial markets)? Do we need Wall Street?...

What do you think of Wall Street (or any financial markets)? Do we need Wall Street? Why or Why not? Do a bit of research on how the financial markets (in the US, or other countries of your interest) were affected by the Covid-19 since March until now. What is "The Paradox of Thrift"? How does that apply to our current situation?

A story in the Wall Street Journal reveals that “Tall Workers Earn More Money”.

A story in the Wall Street Journal reveals that “Tall Workers Earn More Money”. Ron, the president of a company, wants to know whether the relationship between salary and height exists in his own company, and obtains the following data from the human resources department. a. Calculate the correlation between salary and height, and describe the relationship between these two variables. b. How much of the variability in salary can be accounted for by height? c. Is there a...

You have been scouring The Wall Street Journal looking for stocks that are “good values” and...

You have been scouring The Wall Street Journal looking for stocks that are “good values” and have calculated expected returns for five stocks. Assume the risk-free rate (rRF) is 6 percent and the market risk premium (rM - rRF) is 2.7 percent. Which security would be the best investment? (Assume you must choose just one.) c. Expected Return = 5.04%, Beta = -0.4, Required Return = 4.92%, Expected Less Required Return = 0.12% a. Expected Return = 9.01%, Beta = 2,...

An article in the Wall Street Journal described the production of cocoa beans used to make...

An article in the Wall Street Journal described the production of cocoa beans used to make chocolate in African countries such as Ghana and Ivory Coast. The article explained that when prices of cocoa beans rise, it can take two to four years for new trees to produce the pods in which the beans are grown. If the demand for chocolate were to increase, all else equal, would you expect the price of chocolate to be greater after one year...

As reported in the Wall Street Journal in November 2016, the 11 countries that make up...

As reported in the Wall Street Journal in November 2016, the 11 countries that make up the oil cartel OPEC agreed to each cut their oil production over 2017 by 2% in an effort to raise the price of oil and increase their profits (since the demand for oil is inelastic). Let’s use a simplified one-off game with only two countries (Iran and Saudi Arabia) to analyze the strategic interaction between the countries and the likely impact on oil revenues...

Analysts on Wall Street get paid enormous amounts of money to leave their current firm and...

Analysts on Wall Street get paid enormous amounts of money to leave their current firm and bring their clients and business with them to a new firm. The bonus structure for bringing new business to a firm was spread over 6 years. The average analyst was paid $16 million immediately to leave their old firm, $6.5 million at the end of year 1, $7 million at the end of year 2, $8.5 million at the end of year 3, $9...

Question