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The function of the margin of safety is, in essence, that of rendering unnecessary an accurate estimate of the future.

Benjamin Graham

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

Decline Investing Should
People who invest make money for themselves; people who speculate make money for their brokers. And that, in turn, is why Wall Street perennially downplays the durable virtues of investing and hypes the gaudy appeal of speculation.
BENJAMIN GRAHAM

Hype People Wall
High valuations entail high risks.
BENJAMIN GRAHAM

Investing Risk Valuation
In the short-run, the market is a voting machine – reflecting a voter-registration test that requires only money, not intelligence or emotional stability – but in the long- run, the market is a weighing machine.
BENJAMIN GRAHAM

Emotional Long Running
Rather should we say that the market is a voting machine, whereon countless individuals register choices which are the product partly of reason and partly of emotion.
BENJAMIN GRAHAM

Countless Emotion Party Rather
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

Earning Mean Men Power Sure Use
If you are shopping for common stocks, choose them the way you would buy groceries, not the way you would buy perfume.
BENJAMIN GRAHAM

Intelligent Investing Shopping
I quickly convinced myself that the true key to material happiness lay in a modest standard of living which could be achieved with little difficulty under almost all economic conditions.
BENJAMIN GRAHAM

Economic Keys Littles
In the world of securities, courage becomes the supreme virtue after adequate knowledge and a tested judgment are at hand.
BENJAMIN GRAHAM

Adequate Hands Knowledge World
Many progressive economists insist that gold is now in essentially the same position as silver and that the arguments the simon-pure gold advocates use against the white metal can be directed with equal effect against their own fetish.
BENJAMIN GRAHAM

Arguments Gold Use White
Calculate a stock’s price/earnings ratio yourself, using Graham’s formula of current price divided by average earnings over the past three years.
BENJAMIN GRAHAM

Average Current Past Price Years
To establish the right price for a stock, the market must have adequate information, but it by no means follows that is the market has this information it will thereupon establish the right price.
BENJAMIN GRAHAM

Adequate Information Mean
It is absurd to think that the general public can ever make money out of market forecasts.
BENJAMIN GRAHAM

Investing Making Money Thinking
The sillier the market’s behavior, the greater the opportunity for the business like investor.
BENJAMIN GRAHAM

Behavior Investing Opportunity
Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.
BENJAMIN GRAHAM

Issues Portfolios Quality
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
BENJAMIN GRAHAM

Ignorance Loss Typical

The function of the margin of safety is, in essence, that of rendering unnecessary an accurate estimate of the future.

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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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