The intelligent investor shouldn’t ignore Mr. Market entirely. Instead, you should do business with him- but only to the extent that it serves your interests.
BENJAMIN GRAHAMAn investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return.
More Benjamin Graham Quotes
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The investor’s primary interest lies in acquiring and holding suitable securities at suitable prices.
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It’s nonsensical to derive a price/earnings ratio by dividing the known current price by unknown future earnings.
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Even defensive portfolios should be changed from time to time, especially if the securities purchased have an apparently excessive advance and can be replaced by issues much more reasonable priced.
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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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Buy when most people, including experts, are pessimistic, and sell when they are actively optimistic.
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No matter how careful you are, the one risk no investor can ever eliminate is the risk of being wrong. Only by insisting on what Graham called the “margin of safety” – never overpaying, no matter how exciting an investment seems to be – can you minimize your odds of error.
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A great company is not a great investment if you pay too much for the stock.
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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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The distinction between investment and speculation in common stocks has always been a useful one and its disappearance is cause for concern.
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For 99 issues out of 100 we could say that at some price they are cheap enough to buy and at some price they would be so dear that they would be sold.
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In the financial markets, hindsight is forever 20/20, but foresight is legally blind. And thus, for most investors, market timing is a practical and emotional impossibility.
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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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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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The volume of credit depends upon three factors: the desire to borrow, the ability to lend and the desire to lend.
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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