Successful investing is about managing risk, not avoiding it. At first glance, when you realize that Graham put 25% of his fund into a single stock, you might think he was gambling rashly with his investors’ money. But then, when you discover that Graham had painstakingly established that he could liquidate GEICO for at least what he paid for it, it becomes clear that Graham was taking very little financial risk. But he needed enormous courage to take the psychological risk of such a big bet on so unknown a stock.1

And today’s headlines are full of fearful facts and unresolved risks: the death of the 1990s bull market, sluggish economic growth, corporate fraud, the specters of terrorism and war. “Investors don’t like uncertainty,” a market strategist is intoning right now on financial TV or in today’s newspaper. But investors have never liked uncertainty—and yet it is the most fundamental and enduring condition of the investing world. It always has been, and it always will be. At heart, “uncertainty” and “investing” are synonyms. In the real world, no one has ever been given the ability to see that any particular time is the best time to buy stocks. Without a saving faith in the future, no one would ever invest at all. To be an investor, you must be a believer in a better tomorrow.

The most literate of investors, Graham loved the story of Ulysses, told through the poetry of Homer, Alfred Tennyson, and Dante. Late in his life, Graham relished the scene in Dante’s Inferno when Ulysses describes inspiring his crew to sail westward into the unknown waters beyond the gates of Hercules:

“O brothers,” I said, “who after a hundred thousand

perils have reached the west,

in this little waking vigil

that still remains to our senses,

let us not choose to avoid the experience

of the unpeopled world that lies behind the sun.

Consider the seeds from which you sprang:

You were made not to live like beasts,

but to seek virtue and understanding.”

With this little oration I made my shipmates

so eager for the voyage

that it would have hurt to hold them back.

And we swung our stern toward the morning

and turned our oars into wings for the wild flight.2

Investing, too, is an adventure; the financial future is always an uncharted world. With Graham as your guide, your lifelong investing voyage should be as safe and confident as it is adventurous.

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