In Warren Buffett’s 1999 article for Fortune Magazine, “Mr. Buffett on the Stock Market…,” with Carol Loomis, Warren discusses the term investing very early on in the piece: “Let’s start by defining ‘investing.’ The definition is simple but often forgotten: Investing is laying out money now to get more money back in the future–more money in real terms, after taking inflation into account.”
And on the very first page of Chapter 1 in my 1984 copy of The Intelligent Investor, the author, Benjamin Graham, sets out to define “Investment,” in contrast to “Speculation”; he states: “As far back as 1934, in our [Graham and David Dodd] textbook Security Analysis, we attempted a precise formulation of the difference between the two [Investment vs. Speculation], as follows: ‘An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.”
Now determining which securities are actual investments, at least by these definitions, requires work. But at least now we know what we’re looking for.
The article referenced above can be found, here.
