Buy not on optimism, but on arithmetic.
BENJAMIN GRAHAMAs in roulette, same is true of the stock trader, who will find that the expense of trading weights the dice heavily against him.
More Benjamin Graham Quotes
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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.
BENJAMIN GRAHAM -
If fees consume more than 1% of your assets annually, you should probably shop for another adviser.
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In the world of securities, courage becomes the supreme virtue after adequate knowledge and a tested judgment are at hand.
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Nearly everyone interested in common stocks wants to be told by someone else what he thinks the market is going to do. The demand being there, it must be supplied.
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Though business conditions may change, corporations and securities may change, and financial institutions and regulations may change, human nature remains the same.
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The essence of investment management is the management of risks, not the management of returns.
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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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The underlying principles of sound investment should not alter from decade to decade, but the application of these principles must be adapted to significant changes in the financial mechanisms and climate.
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The market is always making mountains out of molehills and exaggerating ordinary vicissitudes into major setbacks.
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At heart, “uncertainty” and “investing” are synonyms.
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Speculators often prosper through ignorance; it is a cliché that in a roaring bull market knowledge is superfluous and experience is a handicap. But the typical experience of the speculator is one of temporary profit and ultimate loss
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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.
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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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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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Thousands of people have tried, and the evidence is clear: The more you trade, the less you keep.
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The Reservoir plan is an engineering mechanism applied to the field of economics, and in its essence it has nothing to do with democracy or any other political philosophy.
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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.
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High valuations entail high risks.
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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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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.
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Nothing important on Wall Street can be counted on to occur exactly in the same way as it happened before.
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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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It is no difficult trick to bring a great deal of energy, study, and native ability into Wall Street and to end up with losses instead of profits. These virtues, if channeled in the wrong directions, become indistinguishable from handicaps.
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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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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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An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return.
BENJAMIN GRAHAM