Valuing the market has nothing to do with where it's going to go next week or next month or next year, a line of thought we never get into. The fact is that markets behave in ways, sometimes for a very long stretch, that are not linked to value. Sooner or later, though, value counts . . . The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage. The products or services that have wide, sustainable moats around them are the ones that deliver rewards to investors.
Warren Buffett in Mr. Buffett on the Stock Market from Fortune (11/22/99)Unfortunately, much of today's payment for order flow disclosure, while factually accurate, is just not clear to investors. The typical disclosure does nothing more than list the variety of compensation arrangements that may result when a broker is paid for customer orders. It does an investor little good to learn that his broker may be compensated according to a dozen different criteria, all, some, or none of which may apply. It's like turning to a weatherman and having him tell you it may rain today, but then again, it may not.
Arthur Levitt in Best Execution: Promise of Integrity, Guardian of Competition (11/4/99)
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