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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

The value of any investment is, and always must be, a function of the price you pay for it.
BENJAMIN GRAHAM

Investing Investment Pay
The intelligent investor is a realist who sells to optimists and buys from pessimists.
BENJAMIN GRAHAM

Intelligent Investing Realist
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
The memory of the financial community is proverbially and distressingly short.
BENJAMIN GRAHAM

Community Investing Memories
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.
BENJAMIN GRAHAM

Facts Paradoxical Subjects
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.
BENJAMIN GRAHAM

Hype People Wall
I quickly convinced myself that the true key to material happiness lay in a modest standard of living which could be achieved with little difficulty under almost all economic conditions.
BENJAMIN GRAHAM

Economic Keys Littles
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

Important Mean War
The market is always making mountains out of molehills and exaggerating ordinary vicissitudes into major setbacks.
BENJAMIN GRAHAM

Mountain Ordinary Vicissitudes
The world has not learned the technique of balanced expansion without the resultant commercial and financial congestion.
BENJAMIN GRAHAM

Expansion Technique World
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

Hundred Loss Taken
Knowledge is only one ingredient on arriving at a stock’s proper price. The other ingredient, fully as important as information, is sound judgment.
BENJAMIN GRAHAM

Arriving Important Sound
Nothing important on Wall Street can be counted on to occur exactly in the same way as it happened before.
BENJAMIN GRAHAM

Important Investing Wall
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”.
BENJAMIN GRAHAM

Age Assets Investing
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 GRAHAM

Investing Looks Return
A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.
BENJAMIN GRAHAM

Ownership Share Trouble Value

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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