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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

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.
BENJAMIN GRAHAM

Common Ownership Share
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 beauty of periodic rebalancing is that it forces you to base your investing decisions on a simple, objective standard.
BENJAMIN GRAHAM

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

Art Important Skills
It requires strength of character in order to think and to act in opposite fashion from the crowd and also patience to wait for opportunities that may be spaced years apart.
BENJAMIN GRAHAM

Character Fashion Thinking
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
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.
BENJAMIN GRAHAM

Investing Issues Portfolio Purchase
Buy when most people, including experts, are pessimistic, and sell when they are actively optimistic.
BENJAMIN GRAHAM

Experts Optimistic People
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 memory of the financial community is proverbially and distressingly short.
BENJAMIN GRAHAM

Community Investing Memories
The value of the security analyst to the investor depends largely on the investor’s own attitude. If the investor asks the analyst the right questions, he is likely to get the right or at least valuable answers.
BENJAMIN GRAHAM

Analysts Answers Attitude
Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.
BENJAMIN GRAHAM

Challenges Intelligent Safety
The market is always making mountains out of molehills and exaggerating ordinary vicissitudes into major setbacks.
BENJAMIN GRAHAM

Mountain Ordinary Vicissitudes
Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.
BENJAMIN GRAHAM

Issues Portfolios Quality
It is a misfortune of the times that all of us must needs be amateur economists-including, and perhaps especially, the professionals.
BENJAMIN GRAHAM

Economist Including Needs Profession
THERE is widespread agreement among economists that abuse of credit constitutes one of the chief unwholesome elements in business booms and is mainly responsible for the ensuing crash and depression.
BENJAMIN GRAHAM

Abuse Agreement Credit

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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