The volume of credit depends upon three factors: the desire to borrow, the ability to lend and the desire to lend.
BENJAMIN GRAHAMNever mingle your speculative and investment operations in the same account nor in any part of your thinking.
More Benjamin Graham Quotes
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Both individual skill (art) and chance are important factors in determining success or failure.
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In other words, the market is not a weighing machine, on which the value of each issue is recorded by an exact and impersonal mechanism, in accordance with its specific qualities.
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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.
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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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It is a misfortune of the times that all of us must needs be amateur economists-including, and perhaps especially, the professionals.
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The market is always making mountains out of molehills and exaggerating ordinary vicissitudes into major setbacks.
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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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A defensive investor can always prosper by looking patiently and calmly through the wreckage of a bear market.
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The intelligent investor is likely to need considerable will power to keep from following the crowd.
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Why should the cotton growers suffer if there is shortage of wheat?
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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
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A great company is not a great investment if you pay too much for the stock.
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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.
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The essence of investment management is the management of risks, not the management of returns.
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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.
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To have a true investment, there must be a true margin of safety. And a true margin of safety is one that can be demonstrated by figures, by persuasive reasoning, and by reference to a body of actual experience.
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The most striking thing about Graham’s discussion of how to allocate your assets between stocks and bonds is that he never mentions the word “age”.
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The thing that I have been emphasizing in my own work for the last few years has been the group approach. To try to buy groups of stocks that meet some simple criterion for being undervalued-regardless of the industry and with very little attention to the individual company.
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Intelligent investment is more a matter of mental approach than it is of technique. A sound mental approach toward stock fluctuations is the touchstone of all successful investment under present-day conditions.
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Both a priori reasoning and experience teach us that as as these funds grow larger the geometrical rate of growth by compound interest ultimately defeats itself.
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Those with the enterprise lack the money and those with the money lack the enterprise to buy stocks when they are cheap.
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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.
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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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It is a fact worth pondering that four centuries ago the evil of “an abundance or surplus” arose from its being kept off the market, while today the evil of surplus lies in its being thrown upon the market.
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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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To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks.
BENJAMIN GRAHAM