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The Reservoir plan is an engineering mechanism applied to the field of economics, and in its essence it has nothing to do with democracy or any other political philosophy.

Benjamin Graham

The purpose of this book is to supply, in the form suitable for laymen, guidance in the adoption and execution of an investment policy.
BENJAMIN GRAHAM

Adoption Book Purpose
Have the courage of your knowledge and experience. If you have formed a conclusion from the facts and if you know your judgment is sound, act on it – even though others may hesitate or differ.
BENJAMIN GRAHAM

Conclusion Facts Judgment May Sound
Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.
BENJAMIN GRAHAM

Challenges Intelligent Safety
The best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.
BENJAMIN GRAHAM

Discipline Financial Plan Want Way
The modern world is not geared properly to the storage of goods.
BENJAMIN GRAHAM

Goods Modern World
The genuine investor in common stocks does not need a great equipment of brain and knowledge, but he does need some unusual qualities of character
BENJAMIN GRAHAM

Brain Character Quality
The ideal form of common stock analysis leads to a valuation of the issue which can be compared with the current price to determine whether or not the security is an attractive purchase.
BENJAMIN GRAHAM

Analysis Determine Investing Issues Valuation
The money cost of the reservoir plan literally fades into insignificance when it is compared with the financial burden which the great depression imposed on the nation.
BENJAMIN GRAHAM

Cost Depression Financial Great
Thus the important and difficult part of sound investment, which hinges upon the investor’s own temperament and attitude, is not much affected by the passing years.
BENJAMIN GRAHAM

Affected Investment Passing Temperament Years
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
It is absurd to think that the general public can ever make money out of market forecasts.
BENJAMIN GRAHAM

Investing Making Money Thinking
Though business conditions may change, corporations and securities may change, and financial institutions and regulations may change, human nature remains the same.
BENJAMIN GRAHAM

Attitude Important Years
The intelligent investor is a realist who sells to optimists and buys from pessimists.
BENJAMIN GRAHAM

Intelligent Investing Realist
A speculator gambles that a stock will go up in price because somebody else will pay even more for it.
BENJAMIN GRAHAM

Investing Pay Speculators
No statement is more true and better applicable to Wall Street than the famous warning of Santayana: “Those who do not remember the past are condemned to repeat it”.
BENJAMIN GRAHAM

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

Investing Principles Safety
Buy when most people, including experts, are pessimistic, and sell when they are actively optimistic.
BENJAMIN GRAHAM

Experts Optimistic People
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
Successful investing is about managing risk, not avoiding it.
BENJAMIN GRAHAM

Investing Risk Successful
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
Confusing speculation with investment is always a mistake.
BENJAMIN GRAHAM

Confusing Investing Mistakes
Never buy a stock immediately after a substantial rise or sell one immediately after a substantial drop.
BENJAMIN GRAHAM

Drop Sells Stock Substantial
Both individual skill (art) and chance are important factors in determining success or failure.
BENJAMIN GRAHAM

Art Important Skills
Buy not on optimism, but on arithmetic.
BENJAMIN GRAHAM

Intelligent Investing Optimism
An intelligent investor gets satisfaction from the thought that his operations are exactly opposite to those of the crowd.
BENJAMIN GRAHAM

Intelligent Investing Opposites
The beauty of periodic rebalancing is that it forces you to base your investing decisions on a simple, objective standard.
BENJAMIN GRAHAM

Decision Investing Simple

The Reservoir plan is an engineering mechanism applied to the field of economics, and in its essence it has nothing to do with democracy or any other political philosophy.

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The Reservoir plan is an engineering mechanism applied to the field of economics, and in its essence it has nothing to do with democracy or any other political philosophy.

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Popular Authors

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