The beauty of periodic rebalancing is that it forces you to base your investing decisions on a simple, objective standard.
BENJAMIN GRAHAMPrice statistics show clearly that instability in raw-material prices is a prime cause of instability of other prices.
More Benjamin Graham Quotes
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The value of any investment is, and always must be, a function of the price you pay for it.
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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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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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Diversification is an established tenet of conservative investment.
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In the short run, the market is a voting machine, but in the long run it is a weighing machine.
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We urge the beginner in security buying not to waste his efforts and his money in trying to beat the market. Let him study security values and initially test out his judgment on price versus value with the smallest possible sums.
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Successful investment may become substantially a matter of techniques and criteria that are learnable, rather than the product of unique and incommunicable mental powers.
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The function of the margin of safety is, in essence, that of rendering unnecessary an accurate estimate of the future.
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In an ideal world, the intelligent investor would hold stocks only when they are cheap and sell them when they become overpriced, then duck into the bunker of bonds and cash until stocks again become cheap enough to buy.
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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.
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Stock speculation is largely a matter of A trying to decide what B, C and D are likely to think-with B, C and D trying to do the same.
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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.
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Obvious prospects for physical growth in a business do not translate into obvious profits for investors.
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Always buy your straw hats in the Winter
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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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Never mingle your speculative and investment operations in the same account nor in any part of your thinking.
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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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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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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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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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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.
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The essence of investment management is the management of risks, not the management of returns.
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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.
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Even the most conservative must realize that the recent transformation of surplus from an individual to a national disaster implies a scathing indictment of our capitalist system as it has now developed.
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Investing is most intelligent when it is most businesslike.
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The story of Joseph in Egypt and of the seven fat and the seven lean years has passed into the homely wisdom of the ages; but our economic thinking seems to have lost contact with so simple and basic approach to prudent management of a nations welfare.
BENJAMIN GRAHAM