Chapter 1 in the seminal book “The Intelligent Investor” by Benjamin Graham is titled “Investment versus Speculation,” which is defined by Jason Zweig as:

Confusing speculation with investment, Graham warns, is always a mistake. In the 1990s that confusion led to mass destruction. Almost everyone, it seems, ran out of patience at once, and America became the Speculation Nation, populated with traders who went shooting from stock to stock like grasshoppers whizzing around in an August hay field.

He goes on to write:

People boasted that they were “right.” But the intelligent investor has no interest in being temporarily right. To reach your long-term financial goals, you must be sustainably and reliably right. The techniques that became so trendy in the 1990s – day trading, ignoring diversification, flipping hot mutual funds, following stock-picking “systems” – seemed to work. But they had no chance of prevailing in the long-run, because they failed to meet all three of Graham’s criteria for investing.

While we attempt to “call” some of the short-term wiggles in the stock market, we are much better with long-term investing and the primary trend of the stock market remains “up.” For example, last Thursday on CNBC we stated:

While our long/intermediate-term models did not register a cautionary signal, our short-term model did so two weeks ago, and we wrote about it. We raised a little cash but stated that any pullback should be mild and contained in the 2940 – 2960 support zone. Boy was that a bad trading call because following the Jay Powell presser, and the President’s increased tariffs on China, the equity markets fell into a selling vacuum. We said that “selling vacuum” ended last Monday with a capitulation low of ~2822 on the S&P 500 (SPX/2918.65), which turned out to be a 90% Downside Day (90% of the Upside to Downside volume came in on the downside and 90% of Points Traded also came in on the downside). In our Trading Flash Tuesday morning we said to not trust the first rally because markets usually come back down and test a capitulation low; and that is exactly what happened on Wednesday when the Dow fell ~589 but closed flat on the session. So, we think the lows are “in,” although we said on CNBC it would not surprise if the equity markets consolidated for few sessions.