2Measuring the Beast

Capital value is income capitalized, and nothing else.

Irving Fisher

In the history of modern investing, one economist towers above all others in influence on the way we examine stocks and bonds. His name was Irving Fisher: distinguished professor of economics at Yale, advisor to presidents, famous popular financial commentator, and, most importantly, author of the seminal treatise on investment value, The Theory of Interest. And it was Fisher, who, a century ago, first attempted to scientifically answer the question, “What is a thing worth?” His career was dazzling, and his precepts are still widely studied today, more than seven decades after the book was written.

Fisher’s story is a caution to all great men, because, in ...

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