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 GRAHAMPrice 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.
More Benjamin Graham Quotes
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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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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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Knowledge is only one ingredient on arriving at a stock’s proper price. The other ingredient, fully as important as information, is sound judgment.
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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.
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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.
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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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By developing your discipline and courage, you can refuse to let other people’s mood swings govern your financial destiny. In the end, how your investments behave is much less important than how you behave.
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The intelligent investor shouldn’t ignore Mr. Market entirely. Instead, you should do business with him- but only to the extent that it serves your interests.
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The volume of credit depends upon three factors: the desire to borrow, the ability to lend and the desire to lend.
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Although 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.
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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
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Good managements produce a good average market price, and bad managements produce bad market prices.
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By refusing to pay too much for an investment, you minimize the chances that your wealth will ever disappear or suddenly be destroyed.
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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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There is no reason to feel any shame in hiring someone to pick stocks or mutual funds for you. But there’s one responsibility that you must never delegate. You, and no one but you, must investigate whether an adviser is trustworthy and charges reasonable fees.
BENJAMIN GRAHAM