To see how much a company is truly earning on the capital it deploys in its businesses, look beyond EPS to Return on Invested Capital (ROIC).
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 qualitative factors upon which most stress is laid are the nature of the business and the character of the management. These elements are exceedingly important, but they are also exceedingly difficult to deal with intelligently.
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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.
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In the old legend the wise men finally boiled down the history of mortal affairs into a single phrase: ‘This too will pass.’
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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.
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Losing some money is an inevitable part of investing, and there’s nothing you can do to prevent it. But to be an intelligent investor, you must take responsibility for ensuring that you never lose most or all of your money.
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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.
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The intelligent investor should recognize that market panics can create great prices for good companies and good prices for great companies.
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The modern world is not geared properly to the storage of goods.
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Before you place your financial future in the hands of an adviser, it’s imperative that you find someone who not only makes you comfortable but whose honesty is beyond reproach.
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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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Individuals who cannot master their emotions are ill-suited to profit from the investment process.
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It should be remembered that a decline of 50% fully offsets a preceding advance of 100%.
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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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High valuations entail high risks.
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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