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 GRAHAMTo see how much a company is truly earning on the capital it deploys in its businesses, look beyond EPS to Return on Invested Capital (ROIC).
More Benjamin Graham Quotes
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No statement is more true and better applicable to Wall Street than the famous warning of Santayana: “Those who do not remember the past are condemned to repeat it”.
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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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A speculator gambles that a stock will go up in price because somebody else will pay even more for it.
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Losing some money is an inevitable part of investing, and there’s nothing you can do to prevent it. But to be an intelligent investor, you must take responsibility for ensuring that you never lose most or all of your money.
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Unusually rapid growth cannot keep up forever; when a company has already registered a brilliant expansion, its very increase in size makes a repetition of its achievement more difficult.
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Stocks can be dynamite.
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An investor calculates what a stock is worth, based on the value of its businesses.
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While enthusiasm may be necessary for great accomplishments elsewhere, on Wall Street it almost invariably leads to disaster
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Do not let anyone else run your business
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A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.
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… the loss of public confidence in the financial community growing out of its own conduct in recent years. I insist that more damage has been done to stock values and to the future of equities from inside Wall Street than from outside Wall Street.
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I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities.
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Diversification is an established tenet of conservative investment.
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By developing your discipline and courage, you can refuse to let other people’s mood swings govern your financial destiny. In the end, how your investments behave is much less important than how you behave.
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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