Calculate a stock’s price/earnings ratio yourself, using Graham’s formula of current price divided by average earnings over the past three years.
BENJAMIN GRAHAMIn the old legend the wise men finally boiled down the history of mortal affairs into a single phrase: ‘This too will pass.’
More Benjamin Graham Quotes
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It requires strength of character in order to think and to act in opposite fashion from the crowd and also patience to wait for opportunities that may be spaced years apart.
BENJAMIN GRAHAM -
The stock market resembles a huge laundry in which institutions take in large blocks of each others washing … without rhyme or reason.
BENJAMIN GRAHAM -
Experience teaches that the time to buy stocks is when their price is unduly depressed by temporary adversity. In other words, they should be bought on a bargain basis or not at all.
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Both individual skill (art) and chance are important factors in determining success or failure.
BENJAMIN GRAHAM -
The people of the United States will not tolerate another deep depression that arises not from any lack of natural resources, productive capacity or man and brain power, but solely from imperfections in the functioning of the system of finance capitalism.
BENJAMIN GRAHAM -
An intelligent investor gets satisfaction from the thought that his operations are exactly opposite to those of the crowd.
BENJAMIN GRAHAM -
Individuals who cannot master their emotions are ill-suited to profit from the investment process.
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Successful investing is about managing risk, not avoiding it.
BENJAMIN GRAHAM -
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.
BENJAMIN GRAHAM -
It’s nonsensical to derive a price/earnings ratio by dividing the known current price by unknown future earnings.
BENJAMIN GRAHAM -
The true investor… will do better if he forgets about the stock market and pays attention to his dividend returns and to the operation results of his companies.
BENJAMIN GRAHAM -
Stocks can be dynamite.
BENJAMIN GRAHAM -
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 intelligent investor gets interested in big growth stocks not when they are at their most popular – but when something goes wrong.
BENJAMIN GRAHAM -
The idea of storage as a solution of economic problems at least has the support of common sense.It is diametrically opposed to the topsy-turvy Alice-in-Wonderland reasoning that has marked so much of our depression thinking and policy.
BENJAMIN GRAHAM