The investor should be aware that even though safety of its principal and interest may be unquestioned, a long term bond could vary widely in market price in response to changes in interest rates.
BENJAMIN GRAHAMAlthough 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.
More Benjamin Graham Quotes
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The investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage.
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People who invest make money for themselves; people who speculate make money for their brokers. And that, in turn, is why Wall Street perennially downplays the durable virtues of investing and hypes the gaudy appeal of speculation.
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The existence of such a war chest might go far to strengthen our prestige and frighten off any would be assailant.
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Undervaluations caused by neglect or prejudice may persist for an inconveniently long time, and the same applies to inflated prices caused by over-enthusiasm or artificial stimulants.
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Price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal.
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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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As in roulette, same is true of the stock trader, who will find that the expense of trading weights the dice heavily against him.
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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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Investing is most intelligent when it is most businesslike.
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Why should the cotton growers suffer if there is shortage of wheat?
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I am more and more impressed with the possibilities of history’s repeating itself on many different counts. You don’t get very far in Wall Street with the simple, convenient conclusion that a given level of prices is not too high.
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Speculators often prosper through ignorance; it is a cliché that in a roaring bull market knowledge is superfluous and experience is a handicap. But the typical experience of the speculator is one of temporary profit and ultimate loss
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I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities.
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It must be fundamentally wrong to reduce production of food and fiber while one-third of our population is still ill fed and ill clothed.
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Instead of passing blithely over into that Promised Land, flowing almost literally with milk and honey, it may be our destiny to wander a full 40 years or more in the wilderness of doubt and divided sentiments.
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The most striking thing about Graham’s discussion of how to allocate your assets between stocks and bonds is that he never mentions the word “age”.
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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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Individuals who cannot master their emotions are ill-suited to profit from the investment process.
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Nothing important on Wall Street can be counted on to occur exactly in the same way as it happened before.
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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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If fees consume more than 1% of your assets annually, you should probably shop for another adviser.
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Experience teaches that the time to buy stocks is when their price is unduly depressed by temporary adversity. In other words, they should be bought on a bargain basis or not at all.
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It’s nonsensical to derive a price/earnings ratio by dividing the known current price by unknown future earnings.
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… 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.
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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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It is a fact worth pondering that four centuries ago the evil of “an abundance or surplus” arose from its being kept off the market, while today the evil of surplus lies in its being thrown upon the market.
BENJAMIN GRAHAM