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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

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.
BENJAMIN GRAHAM

Enthusiasm Long May Prejudice Time
The sillier the market’s behavior, the greater the opportunity for the business like investor.
BENJAMIN GRAHAM

Behavior Investing Opportunity
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
Diversification is an established tenet of conservative investment.
BENJAMIN GRAHAM

Conservative Investing Investment
Both a priori reasoning and experience teach us that as as these funds grow larger the geometrical rate of growth by compound interest ultimately defeats itself.
BENJAMIN GRAHAM

Defeat Growth Teach
The world has not learned the technique of balanced expansion without the resultant commercial and financial congestion.
BENJAMIN GRAHAM

Expansion Technique World
In the old legend the wise men finally boiled down the history of mortal affairs into a single phrase: ‘This too will pass.’
BENJAMIN GRAHAM

Men Phrases Wise
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

Evil Four Lying
Unusually rapid growth cannot keep up forever; when a company has already registered a brilliant expansion, its very increase in size makes a repetition of its achievement more difficult.
BENJAMIN GRAHAM

Achievement Forever Growth
The existence of such a war chest might go far to strengthen our prestige and frighten off any would be assailant.
BENJAMIN GRAHAM

Assailant Chest Prestige Strengthen War
The intelligent investor is a realist who sells to optimists and buys from pessimists.
BENJAMIN GRAHAM

Intelligent Investing Realist
The utility, or intrinsic value of gold as a commodity is now considerably less than in the past; its monetary status has become extraordinarily ambiguous; and its future is highly uncertain.
BENJAMIN GRAHAM

Commodity Gold Past
It’s nonsensical to derive a price/earnings ratio by dividing the known current price by unknown future earnings.
BENJAMIN GRAHAM

Earning Investing Ratios
The thing that I have been emphasizing in my own work for the last few years has been the group approach. To try to buy groups of stocks that meet some simple criterion for being undervalued-regardless of the industry and with very little attention to the individual company.
BENJAMIN GRAHAM

Simple Trying Years
THERE is widespread agreement among economists that abuse of credit constitutes one of the chief unwholesome elements in business booms and is mainly responsible for the ensuing crash and depression.
BENJAMIN GRAHAM

Abuse Agreement Credit
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.
BENJAMIN GRAHAM

Fall Investing Opportunity

Calculate a stock’s price/earnings ratio yourself, using Graham’s formula of current price divided by average earnings over the past three years.

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Calculate a stock’s price/earnings ratio yourself, using Graham’s formula of current price divided by average earnings over the past three years.

Related Topics

Popular Authors

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