In an ideal world, the intelligent investor would hold stocks only when they are cheap and sell them when they become overpriced, then duck into the bunker of bonds and cash until stocks again become cheap enough to buy.
BENJAMIN GRAHAMUndervaluations 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.
More Benjamin Graham Quotes
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Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.
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Diversification is an established tenet of conservative investment.
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There is a close logical connection between the concept of a safety margin and the principle of diversification.
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The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). The intelligent investor is a realist who sells to optimists and buys from pessimists.
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A speculator gambles that a stock will go up in price because somebody else will pay even more for it.
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An investor calculates what a stock is worth, based on the value of its businesses.
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Buy when most people, including experts, are pessimistic, and sell when they are actively optimistic.
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Although there are good and bad companies, there is no such thing as a good stock; there are only good stock prices, which come and go.
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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.
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Wall Street people learn nothing and forget everything.
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An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return.
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It’s nonsensical to derive a price/earnings ratio by dividing the known current price by unknown future earnings.
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It is a misfortune of the times that all of us must needs be amateur economists-including, and perhaps especially, the professionals.
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Confusing speculation with investment is always a mistake.
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Those with the enterprise lack the money and those with the money lack the enterprise to buy stocks when they are cheap.
BENJAMIN GRAHAM