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.
BENJAMIN GRAHAMIf 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.
More Benjamin Graham Quotes
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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.
BENJAMIN GRAHAM -
It is absurd to think that the general public can ever make money out of market forecasts.
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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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We define a bargain issue as one which, on the basis of facts established by analysis, appears to be worth considerably more that it is selling for.
BENJAMIN GRAHAM -
I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities.
BENJAMIN GRAHAM -
Buy not on optimism, but on arithmetic.
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The purpose of this book is to supply, in the form suitable for laymen, guidance in the adoption and execution of an investment policy.
BENJAMIN GRAHAM -
Most businesses change in character and quality over the years, sometimes for the better, perhaps more often for the worse. The investor need not watch his companies’ performance like a hawk; but he should give it a good, hard look from time to time.
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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.
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Buy when most people, including experts, are pessimistic, and sell when they are actively optimistic.
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Price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal.
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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.
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Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.
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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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Successful investing professionals are disciplined and consistent and they think a great deal about what they do and how they do it.
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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 -
The stock market resembles a huge laundry in which institutions take in large blocks of each others washing … without rhyme or reason.
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An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return.
BENJAMIN GRAHAM -
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.
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The best values today are often found in the stocks that were once hot and have since gone cold.
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The intelligent investor should recognize that market panics can create great prices for good companies and good prices for great companies.
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By developing your discipline and courage, you can refuse to let other people’s mood swings govern your financial destiny. In the end, how your investments behave is much less important than how you behave.
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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.
BENJAMIN GRAHAM -
The memory of the financial community is proverbially and distressingly short.
BENJAMIN GRAHAM -
The defensive (or passive) investor will place chief emphasis on the avoidance of serious mistakes or losses. His second aim will be freedom from effort, annoyance, and the need for making frequent decisions.
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The investor’s chief problem – and even his worst enemy – is likely to be himself.
BENJAMIN GRAHAM