This is the second blog in a series exploring the theories of John Burr Williams. You can read the first post here.
John Burr Williams’ book, The Theory of Investment Value, was not about beating the market or getting rich in the market. It was really a wake-up call to the investment elite to offer them a theory of investment value that would encourage more long-term investing and less speculation. Williams postulated that investors’ inability to properly value stocks increasingly led them to become speculators. Most people would not admit that they were speculators, but it was clear by their decisions that they were not appraising the intrinsic value of companies but betting that they knew something that the market did not.