You must never delude yourself into thinking that you’re investing when you’re speculating.
BENJAMIN GRAHAMWhen 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.
More Benjamin Graham Quotes
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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 -
Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.
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The value of any investment is, and always must be, a function of the price you pay for it.
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The story of Joseph in Egypt and of the seven fat and the seven lean years has passed into the homely wisdom of the ages; but our economic thinking seems to have lost contact with so simple and basic approach to prudent management of a nations welfare.
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High valuations entail high risks.
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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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The memory of the financial community is proverbially and distressingly short.
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Individuals who cannot master their emotions are ill-suited to profit from the investment process.
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As in roulette, same is true of the stock trader, who will find that the expense of trading weights the dice heavily against him.
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By refusing to pay too much for an investment, you minimize the chances that your wealth will ever disappear or suddenly be destroyed.
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Successful investing professionals are disciplined and consistent and they think a great deal about what they do and how they do it.
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Thus the important and difficult part of sound investment, which hinges upon the investor’s own temperament and attitude, is not much affected by the passing years.
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Price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal.
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Never buy a stock because it has gone up or sell one because it has gone down.
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Nothing important on Wall Street can be counted on to occur exactly in the same way as it happened before.
BENJAMIN GRAHAM