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There is a close logical connection between the concept of a safety margin and the principle of diversification.

Benjamin Graham

The intelligent investor should recognize that market panics can create great prices for good companies and good prices for great companies.
BENJAMIN GRAHAM

Intelligent Investing Panic
Always buy your straw hats in the Winter
BENJAMIN GRAHAM

Hat Investing Winter
The function of the margin of safety is, in essence, that of rendering unnecessary an accurate estimate of the future.
BENJAMIN GRAHAM

Essence Safety Unnecessary
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.
BENJAMIN GRAHAM

Conservative Realizing Transformation
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.
BENJAMIN GRAHAM

Intelligent Optimism Swings
It should be remembered that a decline of 50% fully offsets a preceding advance of 100%.
BENJAMIN GRAHAM

Decline Investing Should
The existence of such a war chest might go far to strengthen our prestige and frighten off any would be assailant.
BENJAMIN GRAHAM

Assailant Chest Prestige Strengthen War
The best values today are often found in the stocks that were once hot and have since gone cold.
BENJAMIN GRAHAM

Gone Hot Today
Always remember that market quotations are there for convenience, either to be taken advantage of or to be ignored.
BENJAMIN GRAHAM

Ignored Investing Taken
The stock market resembles a huge laundry in which institutions take in large blocks of each others washing … without rhyme or reason.
BENJAMIN GRAHAM

Block Investing Laundry
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.
BENJAMIN GRAHAM

Matter Thinking Trying
Good managements produce a good average market price, and bad managements produce bad market prices.
BENJAMIN GRAHAM

Average Good Man Management
Nothing important on Wall Street can be counted on to occur exactly in the same way as it happened before.
BENJAMIN GRAHAM

Important Investing Wall
Both individual skill (art) and chance are important factors in determining success or failure.
BENJAMIN GRAHAM

Art Important Skills
The market is always making mountains out of molehills and exaggerating ordinary vicissitudes into major setbacks.
BENJAMIN GRAHAM

Mountain Ordinary Vicissitudes
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.
BENJAMIN GRAHAM

Destiny Discipline Swings

There is a close logical connection between the concept of a safety margin and the principle of diversification.

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There is a close logical connection between the concept of a safety margin and the principle of diversification.

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