Long ago, Ben Graham taught me that “Price is what you pay; value is what you get.” Whether we're talking about socks or stocks, I like buying qualit… - Warren Buffett

My old boss, Ben Graham, told me very early on you get more trouble with a good idea than a bad idea, because the good idea works. I mean, it's a good idea to buy a home, for example. And then people go crazy sometimes. The good idea works, and it works, and it works. Stocks work out better than bonds most of the time. And, after a while, people forget that there were some other limiting conditions. With Edgar Lawrence Smith's book, it was that when bonds yield the same as stocks — which was the case then — the stocks are going to outperform because they have this retained earnings. So stocks started going up in the Twenties and all of a sudden they were selling at 5 or 6 times the prices as when they bought the book. And the original correct perception on his part had experienced changing conditions, but people ... got their confirmation through stock prices. That's what happens in bull markets. People start out thinking stocks are cheap, and then they start thinking stocks have gone up. And, a stock can be a good buy or a bad buy. A bond can be a good buy or a bad buy. It depends on price.

The difference between successful people and very successful people is that very successful people say “no” to almost everything.

When the price of a stock can be influenced by a "herd" on Wall Street with prices set at the margin by the most emotional person, or the greediest person, or the most depressed person, it is hard to argue that the market always prices rationally. In fact, market prices are often nonsensical.