Investing

Here we have a few words of wisdom extracted from A Century of Prices (1919) by Theodore Burton and George Selden:

“At low prices, stocks are mostly in the hands of courageous, outright investors, who cannot easily be frightened into selling. As prices rise, more and more stocks pass into the hands of buyers for profit only. The higher quotations go, the more the public comes into the market…

Buyers at higher prices are necessarily of a weaker class – weaker in judgement and therefore weaker in resources – than buyers at lower prices…

Eventually these weak speculative holders have bought all they want, or some of them become discouraged, or some unfavorable event dampens their ardor. They then begin to sell out on each other – since prices are too high to attract genuine investors for income.

For such a situation there is no cure except a decline to a level which will attract the stronger class of buyer…"

Via Tyler Durden at ZeroHedge and Nicholas Colas of DataTrek Research (registration required).