Wall Street has a few prudent principles; the trouble is that they are always forgotten when they are most needed.
BENJAMIN GRAHAMThe function of the margin of safety is, in essence, that of rendering unnecessary an accurate estimate of the future.
More Benjamin Graham Quotes
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There is no reason to feel any shame in hiring someone to pick stocks or mutual funds for you. But there’s one responsibility that you must never delegate. You, and no one but you, must investigate whether an adviser is trustworthy and charges reasonable fees.
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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.
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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).
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Nearly everyone interested in common stocks wants to be told by someone else what he thinks the market is going to do. The demand being there, it must be supplied.
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Always remember that market quotations are there for convenience, either to be taken advantage of or to be ignored.
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The money cost of the reservoir plan literally fades into insignificance when it is compared with the financial burden which the great depression imposed on the nation.
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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.
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Never buy a stock immediately after a substantial rise or sell one immediately after a substantial drop.
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An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return.
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The existence of such a war chest might go far to strengthen our prestige and frighten off any would be assailant.
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Individuals who cannot master their emotions are ill-suited to profit from the investment process.
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When somebody asserts that a stock has an earning power of so much, I am sure that the person who hears him doesn’t know what he means, and there is a good chance that the man who uses it doesn’t know what it means.
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The volume of credit depends upon three factors: the desire to borrow, the ability to lend and the desire to lend.
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Although there are good and bad companies, there is no such thing as a good stock; there are only good stock prices, which come and go.
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Knowledge is only one ingredient on arriving at a stock’s proper price. The other ingredient, fully as important as information, is sound judgment.
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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.
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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.
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Losing some money is an inevitable part of investing, and there’s nothing you can do to prevent it. But to be an intelligent investor, you must take responsibility for ensuring that you never lose most or all of your money.
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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.
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As in roulette, same is true of the stock trader, who will find that the expense of trading weights the dice heavily against him.
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If General Motors is worth $60 a share to an investor it must be because the full common-stock ownership of this gigantic enterprise as a whole is worth 43 million (shares) times $60, or no less than $2,600 million.
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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.
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To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks.
BENJAMIN GRAHAM -
… the loss of public confidence in the financial community growing out of its own conduct in recent years. I insist that more damage has been done to stock values and to the future of equities from inside Wall Street than from outside Wall Street.
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There is something paradoxical in the fact that by establishing an export market we subject our entire domestic production to the vagaries of that market.
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The genuine investor in common stocks does not need a great equipment of brain and knowledge, but he does need some unusual qualities of character
BENJAMIN GRAHAM