We have found that there is a force at work in our common stock holdings which tends ever toward increasing their principal value in terms of dollars… - Edgar Lawrence Smith

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We have found that there is a force at work in our common stock holdings which tends ever toward increasing their principal value in terms of dollars, a force resulting from the profitable reinvestment, by the companies involved, of their undistributed earnings. We have found that unless we have had the extreme misfortune to invest at the very peak of a noteworthy rise, those periods in which the average market value of our holdings remain less than the amount we paid for them are of comparatively short duration, and that even if we have bought at the very peak, there is definitely to be expected a period in which we may recover as many dollars as we have received. Our hazard even in such extreme cases appears to be that of time alone.