In the Economic Times' "Quote of the Day" series, veteran value investor Arnold Van Den Berg offers a piece of investing wisdom: "Regardless of yield, when investments are absent of value, cash is always a better option than permanently losing money."

Van Den Berg's insight stresses that yield alone does not make an investment attractive. When value is absent and the risk of permanent capital loss is high, holding cash may be the wiser course. Cash allows investors to protect their capital and wait patiently for better opportunities to emerge.

High yields can be misleading when the underlying value of an asset is weak. A large payout may mask deteriorating fundamentals or excessive risk. For that reason, Van Den Berg's philosophy suggests investors should prioritise capital preservation, valuation and quality rather than chase returns without weighing the accompanying risks.

The distinction he draws—between permanent loss of capital and temporary underperformance or the opportunity cost of holding cash—is a central theme in value investing. The approach traces back to Benjamin Graham, who emphasized margin of safety, and was carried forward by investors such as Warren Buffett, who has similarly described being willing to hold cash for extended periods when attractive opportunities are scarce.

Arnold Van Den Berg is a well-known American value investor who founded Century Management, an Austin, Texas-based investment advisory firm, in 1974. He built his reputation on a disciplined, value-oriented approach rooted in the tradition of Benjamin Graham, focusing on buying securities at a significant discount to their intrinsic value.

The quote appears in the ET Markets Wall Street Guide section, alongside US market data as of 28 Aug 2026, 01:30 AM IST, including S&P 500 top gainers and top losers.

Source: Economic Times Markets