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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

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
There is a close logical connection between the concept of a safety margin and the principle of diversification.
BENJAMIN GRAHAM

Investing Principles Safety
The people of the United States will not tolerate another deep depression that arises not from any lack of natural resources, productive capacity or man and brain power, but solely from imperfections in the functioning of the system of finance capitalism.
BENJAMIN GRAHAM

Imperfection Men People
Successful investing is about managing risk, not avoiding it.
BENJAMIN GRAHAM

Investing Risk Successful
If I have noticed anything over these 60 years on Wall Street, it is that people do not succeed in forecasting what`s going to happen to the stock market.
BENJAMIN GRAHAM

People Wall Years
The stock market resembles a huge laundry in which institutions take in large blocks of each others washing … without rhyme or reason.
BENJAMIN GRAHAM

Block Investing Laundry
The sillier the market’s behavior, the greater the opportunity for the business like investor.
BENJAMIN GRAHAM

Behavior Investing Opportunity
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
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

Investing Long Safety
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 GRAHAM

Ducks Intelligent Investing
Investing is most intelligent when it is most businesslike.
BENJAMIN GRAHAM

Intelligent Investing
I am more and more impressed with the possibilities of history’s repeating itself on many different counts. You don’t get very far in Wall Street with the simple, convenient conclusion that a given level of prices is not too high.
BENJAMIN GRAHAM

Different Simple Wall
To establish the right price for a stock, the market must have adequate information, but it by no means follows that is the market has this information it will thereupon establish the right price.
BENJAMIN GRAHAM

Adequate Information Mean
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 utility, or intrinsic value of gold as a commodity is now considerably less than in the past; its monetary status has become extraordinarily ambiguous; and its future is highly uncertain.
BENJAMIN GRAHAM

Commodity Gold Past
Obvious prospects for physical growth in a business do not translate into obvious profits for investors.
BENJAMIN GRAHAM

Growth Investing Profit

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.

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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.

Related Topics

Popular Authors

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