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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

The volume of credit depends upon three factors: the desire to borrow, the ability to lend and the desire to lend.
BENJAMIN GRAHAM

Credit Desire Three
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.
BENJAMIN GRAHAM

Change Intelligent Significant Sound
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.
BENJAMIN GRAHAM

Imperfection Men People
The investor’s primary interest lies in acquiring and holding suitable securities at suitable prices.
BENJAMIN GRAHAM

Interest Lying Market Timing
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.
BENJAMIN GRAHAM

Errors Odds Safety
You must never delude yourself into thinking that you’re investing when you’re speculating.
BENJAMIN GRAHAM

Investing Speculating Thinking
We have not known a single person who has consistently or lastingly make money by thus “following the market”. We do not hesitate to declare this approach is as fallacious as it is popular.
BENJAMIN GRAHAM

Approach Investing Making Money
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
To enjoy a reasonable chance for continued better than average results, the investor must follow policies which are (1) inherently sound and promising, and (2) not popular on Wall Street.
BENJAMIN GRAHAM

Average Sound Wall
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
We urge the beginner in security buying not to waste his efforts and his money in trying to beat the market. Let him study security values and initially test out his judgment on price versus value with the smallest possible sums.
BENJAMIN GRAHAM

Beginner Effort Trying
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.
BENJAMIN GRAHAM

Emotional Forever Investing
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
In other words, the market is not a weighing machine, on which the value of each issue is recorded by an exact and impersonal mechanism, in accordance with its specific qualities.
BENJAMIN GRAHAM

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

Decline Investing Should
Whether we like it or not, government intervention in the face of surplus is here to stay.
BENJAMIN GRAHAM

Faces Government Surplus

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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