“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 market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). The intelligent investor is a realist who sells to optimists and buys from pessimists.

Wall Street people learn nothing and forget everything.

The best values today are often found in the stocks that were once hot and have since gone cold.

Thus the important and difficult part of sound investment, which hinges upon the investor’s own temperament and attitude, is not much affected by the passing years.

For 99 issues out of 100 we could say that at some price they are cheap enough to buy and at some price they would be so dear that they would be sold.

In the short-run, the market is a voting machine – reflecting a voter-registration test that requires only money, not intelligence or emotional stability – but in the long- run, the market is a weighing machine.

The essence of investment management is the management of risks, not the management of returns.

Knowledge is only one ingredient on arriving at a stock’s proper price. The other ingredient, fully as important as information, is sound judgment.

Nothing important on Wall Street can be counted on to occur exactly in the same way as it happened before.

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).

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 best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.

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.

Instead of passing blithely over into that Promised Land, flowing almost literally with milk and honey, it may be our destiny to wander a full 40 years or more in the wilderness of doubt and divided sentiments.

The function of the margin of safety is, in essence, that of rendering unnecessary an accurate estimate of the future.

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.

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.

It’s nonsensical to derive a price/earnings ratio by dividing the known current price by unknown future earnings.

The value of any investment is, and always must be, a function of the price you pay for it.

Whatever men attempt, they seem driven to overdo. When hopes are soaring, I always repeat to myself that two and two still make four.

Before you invest, you must ensure that you have realistically assessed your probability of being right and how you will react to the consequences of being wrong.

The intelligent investor gets interested in big growth stocks not when they are at their most popular – but when something goes wrong.

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.

The intelligent investor should recognize that market panics can create great prices for good companies and good prices for great companies.