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The essence of investment management is the management of risks, not the management of returns.

Benjamin Graham

We have not known a single person who has consistently or lastingly make money by thus “following the market”. We do not hesitate to declare this approach is as fallacious as it is popular.
BENJAMIN GRAHAM

Approach Investing Making Money
To be an investor you must be a believer in a better tomorrow.
BENJAMIN GRAHAM

Believer Investing Tomorrow
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 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.
BENJAMIN GRAHAM

Intelligent Optimism Swings
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
The modern world is not geared properly to the storage of goods.
BENJAMIN GRAHAM

Goods Modern World
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
To have a true investment, there must be a true margin of safety. And a true margin of safety is one that can be demonstrated by figures, by persuasive reasoning, and by reference to a body of actual experience.
BENJAMIN GRAHAM

Body Investment Safety
We define a bargain issue as one which, on the basis of facts established by analysis, appears to be worth considerably more that it is selling for.
BENJAMIN GRAHAM

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

Art Important Skills
High valuations entail high risks.
BENJAMIN GRAHAM

Investing Risk Valuation
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
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
An investor calculates what a stock is worth, based on the value of its businesses.
BENJAMIN GRAHAM

Business Investing Investors Values
Never buy a stock because it has gone up or sell one because it has gone down.
BENJAMIN GRAHAM

Gone Investing Sell
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 essence of investment management is the management of risks, not the management of returns.

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The essence of investment management is the management of risks, not the management of returns.

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