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An investor calculates what a stock is worth, based on the value of its businesses.

Benjamin Graham

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
The memory of the financial community is proverbially and distressingly short.
BENJAMIN GRAHAM

Community Investing Memories
In the old legend the wise men finally boiled down the history of mortal affairs into a single phrase: ‘This too will pass.’
BENJAMIN GRAHAM

Men Phrases Wise
Never mingle your speculative and investment operations in the same account nor in any part of your thinking.
BENJAMIN GRAHAM

Investing Investment Thinking
Nothing important on Wall Street can be counted on to occur exactly in the same way as it happened before.
BENJAMIN GRAHAM

Important Investing Wall
It should be remembered that a decline of 50% fully offsets a preceding advance of 100%.
BENJAMIN GRAHAM

Decline Investing Should
Obvious prospects for physical growth in a business do not translate into obvious profits for investors.
BENJAMIN GRAHAM

Growth Investing Profit
No matter how careful you are, the one risk no investor can ever eliminate is the risk of being wrong. Only by insisting on what Graham called the “margin of safety” – never overpaying, no matter how exciting an investment seems to be – can you minimize your odds of error.
BENJAMIN GRAHAM

Errors Odds Safety
By refusing to pay too much for an investment, you minimize the chances that your wealth will ever disappear or suddenly be destroyed.
BENJAMIN GRAHAM

Investing Pay Too Much
The market is always making mountains out of molehills and exaggerating ordinary vicissitudes into major setbacks.
BENJAMIN GRAHAM

Mountain Ordinary Vicissitudes
It is worth pointing out that assuredly not more than one person out of a hundred who stayed in the market after after 1925 emerged from it with a net profit and that the speculative losses taken were appalling.
BENJAMIN GRAHAM

Hundred Loss Taken
In the world of securities, courage becomes the supreme virtue after adequate knowledge and a tested judgment are at hand.
BENJAMIN GRAHAM

Adequate Hands Knowledge World
Calculate a stock’s price/earnings ratio yourself, using Graham’s formula of current price divided by average earnings over the past three years.
BENJAMIN GRAHAM

Average Current Past Price Years
Real investment risk is measured not by the percent that a stock may decline in price in relation to the general market in a given period, but by the danger of a loss of quality and earnings power through economic changes or deterioration in management.
BENJAMIN GRAHAM

Earning Loss Real Risk
Why should the cotton growers suffer if there is shortage of wheat?
BENJAMIN GRAHAM

Cotton Suffering Wheat
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.
BENJAMIN GRAHAM

Change Intelligent Significant Sound

An investor calculates what a stock is worth, based on the value of its businesses.

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An investor calculates what a stock is worth, based on the value of its businesses.

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