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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

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
The world has not learned the technique of balanced expansion without the resultant commercial and financial congestion.
BENJAMIN GRAHAM

Expansion Technique World
The defensive (or passive) investor will place chief emphasis on the avoidance of serious mistakes or losses. His second aim will be freedom from effort, annoyance, and the need for making frequent decisions.
BENJAMIN GRAHAM

Effort Loss Mistakes
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
The intelligent investor is likely to need considerable will power to keep from following the crowd.
BENJAMIN GRAHAM

Crowd Following Intelligent Needs
By refusing to pay too much for an investment, you minimize the chances that your wealth will ever disappear or suddenly be destroyed.
BENJAMIN GRAHAM

Investing Pay Too Much
Thus the important and difficult part of sound investment, which hinges upon the investor’s own temperament and attitude, is not much affected by the passing years.
BENJAMIN GRAHAM

Affected Investment Passing Temperament Years
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.
BENJAMIN GRAHAM

Enthusiasm Long May Prejudice Time
The chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions.
BENJAMIN GRAHAM

Investing Loss Quality
Every corporate security may be best viewed, in the first instance, as an ownership interest in, or a claim against, a specific business enterprise.
BENJAMIN GRAHAM

Firsts May Ownership
It’s nonsensical to derive a price/earnings ratio by dividing the known current price by unknown future earnings.
BENJAMIN GRAHAM

Earning Investing Ratios
Speculative stock movements are carried too far in both directions, frequently in the general market and at all times in at least some of the individual issues.
BENJAMIN GRAHAM

Investing Issues Movement
The value of any investment is, and always must be, a function of the price you pay for it.
BENJAMIN GRAHAM

Investing Investment Pay
Price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal.
BENJAMIN GRAHAM

Fall Investing Opportunity
The intelligent investor is a realist who sells to optimists and buys from pessimists.
BENJAMIN GRAHAM

Intelligent Investing Realist
Though business conditions may change, corporations and securities may change, and financial institutions and regulations may change, human nature remains the same.
BENJAMIN GRAHAM

Attitude Important Years

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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