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The investor should be aware that even though safety of its principal and interest may be unquestioned, a long term bond could vary widely in market price in response to changes in interest rates.

Benjamin Graham

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

Investing Speculating Thinking
Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble… to give way to hope, fear and greed.
BENJAMIN GRAHAM

Hope Money Time
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
A great company is not a great investment if you pay too much for the stock.
BENJAMIN GRAHAM

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

Art Important Skills
To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks.
BENJAMIN GRAHAM

Investing Looks People
Before you place your financial future in the hands of an adviser, it’s imperative that you find someone who not only makes you comfortable but whose honesty is beyond reproach.
BENJAMIN GRAHAM

Hands Honesty Investing
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
The investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage.
BENJAMIN GRAHAM

Investing Permit Worried
An intelligent investor gets satisfaction from the thought that his operations are exactly opposite to those of the crowd.
BENJAMIN GRAHAM

Intelligent Investing Opposites
Before you invest, you must ensure that you have realistically assessed your probability of being right and how you will react to the consequences of being wrong.
BENJAMIN GRAHAM

Being Investing Probability Wrong
The memory of the financial community is proverbially and distressingly short.
BENJAMIN GRAHAM

Community Investing Memories
There is no reason to feel any shame in hiring someone to pick stocks or mutual funds for you. But there’s one responsibility that you must never delegate. You, and no one but you, must investigate whether an adviser is trustworthy and charges reasonable fees.
BENJAMIN GRAHAM

Investing Responsibility Shame
Why should the cotton growers suffer if there is shortage of wheat?
BENJAMIN GRAHAM

Cotton Suffering Wheat
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
In security analysis the prime stress is laid upon protection against untoward events. We obtain this protection by insisting upon margins of safety, or values well in excess of the price paid.
BENJAMIN GRAHAM

Events Safety Stress
Thousands of people have tried, and the evidence is clear: The more you trade, the less you keep.
BENJAMIN GRAHAM

Evidence Investing People
In the old legend the wise men finally boiled down the history of mortal affairs into a single phrase: ‘This too will pass.’
BENJAMIN GRAHAM

Men Phrases Wise
It is a fact worth pondering that four centuries ago the evil of “an abundance or surplus” arose from its being kept off the market, while today the evil of surplus lies in its being thrown upon the market.
BENJAMIN GRAHAM

Evil Four Lying
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
The true investor… will do better if he forgets about the stock market and pays attention to his dividend returns and to the operation results of his companies.
BENJAMIN GRAHAM

Attention Investing Pay
As in roulette, same is true of the stock trader, who will find that the expense of trading weights the dice heavily against him.
BENJAMIN GRAHAM

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

Issues Portfolios Quality
There is something paradoxical in the fact that by establishing an export market we subject our entire domestic production to the vagaries of that market.
BENJAMIN GRAHAM

Facts Paradoxical Subjects
The chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions.
BENJAMIN GRAHAM

Investing Loss Quality

The investor should be aware that even though safety of its principal and interest may be unquestioned, a long term bond could vary widely in market price in response to changes in interest rates.

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The investor should be aware that even though safety of its principal and interest may be unquestioned, a long term bond could vary widely in market price in response to changes in interest rates.

Related Topics

Popular Authors

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