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It is absurd to think that the general public can ever make money out of market forecasts.

Benjamin Graham

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

Business Investing Investors Values
As in roulette, same is true of the stock trader, who will find that the expense of trading weights the dice heavily against him.
BENJAMIN GRAHAM

Intelligent Investing Weight
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 GRAHAM

Matter Thinking Trying
In security analysis the prime stress is laid upon protection against untoward events. We obtain this protection by insisting upon margins of safety, or values well in excess of the price paid.
BENJAMIN GRAHAM

Events Safety Stress
If fees consume more than 1% of your assets annually, you should probably shop for another adviser.
BENJAMIN GRAHAM

Assets Fees Investing
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
Although there are good and bad companies, there is no such thing as a good stock; there are only good stock prices, which come and go.
BENJAMIN GRAHAM

Bad Company Good Investing Price Stock
Never buy a stock immediately after a substantial rise or sell one immediately after a substantial drop.
BENJAMIN GRAHAM

Drop Sells Stock Substantial
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
It should be remembered that a decline of 50% fully offsets a preceding advance of 100%.
BENJAMIN GRAHAM

Decline Investing Should
If General Motors is worth $60 a share to an investor it must be because the full common-stock ownership of this gigantic enterprise as a whole is worth 43 million (shares) times $60, or no less than $2,600 million.
BENJAMIN GRAHAM

Common Ownership Share
The only thing you should do with pro forma earnings is ignore them.
BENJAMIN GRAHAM

Earning Investing Should
… 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.
BENJAMIN GRAHAM

Loss Wall Years
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.
BENJAMIN GRAHAM

Ownership Share Trouble Value
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

It is absurd to think that the general public can ever make money out of market forecasts.

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It is absurd to think that the general public can ever make money out of market forecasts.

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