Price statistics show clearly that instability in raw-material prices is a prime cause of instability of other prices.
BENJAMIN GRAHAMThe 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.
More Benjamin Graham Quotes
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The investor’s chief problem – and even his worst enemy – is likely to be himself.
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The intelligent investor is a realist who sells to optimists and buys from pessimists.
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A great company is not a great investment if you pay too much for the stock.
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In the financial markets, hindsight is forever 20/20, but foresight is legally blind. And thus, for most investors, market timing is a practical and emotional impossibility.
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Good managements produce a good average market price, and bad managements produce bad market prices.
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Whenever the investor sold out in an upswing as soon as the top level of the previous well-recognized bull market was reached, he had a chance in the next bear market to buy back at one third (or better) below his selling price.
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A defensive investor can always prosper by looking patiently and calmly through the wreckage of a bear market.
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High valuations entail high risks.
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Even defensive portfolios should be changed from time to time, especially if the securities purchased have an apparently excessive advance and can be replaced by issues much more reasonable priced.
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Most businesses change in character and quality over the years, sometimes for the better, perhaps more often for the worse. The investor need not watch his companies’ performance like a hawk; but he should give it a good, hard look from time to time.
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The Reservoir system will function not only as an equalizer of business conditions, but also as a national store to meet further emergencies, such as war and drought, and-most important of all-as the concrete means of developing a steadily higher living standard for all.
BENJAMIN GRAHAM -
The idea of storage as a solution of economic problems at least has the support of common sense.It is diametrically opposed to the topsy-turvy Alice-in-Wonderland reasoning that has marked so much of our depression thinking and policy.
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If you are shopping for common stocks, choose them the way you would buy groceries, not the way you would buy perfume.
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It should be remembered that a decline of 50% fully offsets a preceding advance of 100%.
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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