Benjamin Graham Quotes
The beauty of periodic rebalancing is that it forces you to base your investing decisions on a simple, objective standard.
Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.
The margin of safety is always dependent on the price paid. It will be large at one price, small at some higher price, nonexistent at some still higher price.
As in roulette, same is true of the stock trader, who will find that the expense of trading weights the dice heavily against him.
Both individual skill (art) and chance are important factors in determining success or failure.
Those with the enterprise lack the money and those with the money lack the enterprise to buy stocks when they are cheap.
The intelligent investor shouldn't ignore Mr. Market entirely. Instead, you should do business with him- but only to the extent that it serves your interests.
It should be remembered that a decline of 50% fully offsets a preceding advance of 100%.
Unusually rapid growth cannot keep up forever; when a company has already registered a brilliant expansion, its very increase in size makes a repetition of its achievement more difficult.
I quickly convinced myself that the true key to material happiness lay in a modest standard of living which could be achieved with little difficulty under almost all economic conditions.
To see how much a company is truly earning on the capital it deploys in its businesses, look beyond EPS to Return on Invested Capital (ROIC).
In security analysis the prime stress is laid upon protection against untoward events. We obtain this protection by insisting upon margins of safety, or values well in excess of the price paid.
Mr. Market's job is to provide you with prices; your job is to decide whether it is to your advantage to act on them. You no not have to trade with hime just because he constantly begs you to.
In the financial markets, hindsight is forever 20/20, but foresight is legally blind. And thus, for most investors, market timing is a practical and emotional impossibility.
It is absurd to think that the general public can ever make money out of market forecasts.
No statement is more true and better applicable to Wall Street than the famous warning of Santayana: "Those who do not remember the past are condemned to repeat it".
The function of the margin of safety is, in essence, that of rendering unnecessary an accurate estimate of the future.
Obvious prospects for physical growth in a business do not translate into obvious profits for investors.
A defensive investor can always prosper by looking patiently and calmly through the wreckage of a bear market.
If I have noticed anything over these 60 years on Wall Street, it is that people do not succeed in forecasting what's going to happen to the stock market.
The purpose of this book is to supply, in the form suitable for laymen, guidance in the adoption and execution of an investment policy.
Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.
Never mingle your speculative and investment operations in the same account nor in any part of your thinking.
The best values today are often found in the stocks that were once hot and have since gone cold.
The market is always making mountains out of molehills and exaggerating ordinary vicissitudes into major setbacks.
To enjoy a reasonable chance for continued better than average results, the investor must follow policies which are (1) inherently sound and promising, and (2) not popular on Wall Street.
The world has not learned the technique of balanced expansion without the resultant commercial and financial congestion.
The investor should be aware that even though safety of its principal and interest may be unquestioned, a long term bond could vary widely in market price in response to changes in interest rates.
We have not known a single person who has consistently or lastingly make money by thus "following the market". We do not hesitate to declare this approach is as fallacious as it is popular.
While enthusiasm may be necessary for great accomplishments elsewhere, on Wall Street it almost invariably leads to disaster
A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.
Undervaluations caused by neglect or prejudice may persist for an inconveniently long time, and the same applies to inflated prices caused by over-enthusiasm or artificial stimulants.
The volume of credit depends upon three factors: the desire to borrow, the ability to lend and the desire to lend.
The utility, or intrinsic value of gold as a commodity is now considerably less than in the past; its monetary status has become extraordinarily ambiguous; and its future is highly uncertain.
The investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage.
Before you place your financial future in the hands of an adviser, it's imperative that you find someone who not only makes you comfortable but whose honesty is beyond reproach.
Even defensive portfolios should be changed from time to time, especially if the securities purchased have an apparently excessive advance and can be replaced by issues much more reasonable priced.
The investor's primary interest lies in acquiring and holding suitable securities at suitable prices.
Wall Street has a few prudent principles; the trouble is that they are always forgotten when they are most needed.
Nothing important on Wall Street can be counted on to occur exactly in the same way as it happened before.
THERE is widespread agreement among economists that abuse of credit constitutes one of the chief unwholesome elements in business booms and is mainly responsible for the ensuing crash and depression.
Successful investment may become substantially a matter of techniques and criteria that are learnable, rather than the product of unique and incommunicable mental powers.
The ideal form of common stock analysis leads to a valuation of the issue which can be compared with the current price to determine whether or not the security is an attractive purchase.
Traditionally the investor has been the man with patience and the courage of his convictions who would buy when the harried or disheartened speculator was selling.
Speculative stock movements are carried too far in both directions, frequently in the general market and at all times in at least some of the individual issues.
