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AAII Investor Update: Is Facebook an Investment or a Trade?

Should you buy Facebook (FB) or avoid it? The answer depends on whether you are looking to speculate or invest.

Benjamin Graham defined speculation in his classic book “The Intelligent Investor” as primarily “anticipating and profiting from market fluctuations.” Conversely, he defined investing as “acquiring and holding suitable securities at suitable prices.” Notice the final two words used to describe investing: “suitable prices.” When it comes to investing, valuation matters—always.

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