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Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.

Benjamin Graham

The modern world is not geared properly to the storage of goods.
BENJAMIN GRAHAM

Goods Modern World
Buy not on optimism, but on arithmetic.
BENJAMIN GRAHAM

Intelligent Investing Optimism
Successful investment may become substantially a matter of techniques and criteria that are learnable, rather than the product of unique and incommunicable mental powers.
BENJAMIN GRAHAM

Successful Technique Unique
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
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.
BENJAMIN GRAHAM

People Wall Years
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
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
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
Real investment risk is measured not by the percent that a stock may decline in price in relation to the general market in a given period, but by the danger of a loss of quality and earnings power through economic changes or deterioration in management.
BENJAMIN GRAHAM

Earning Loss Real Risk
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
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
For 99 issues out of 100 we could say that at some price they are cheap enough to buy and at some price they would be so dear that they would be sold.
BENJAMIN GRAHAM

Investing Issue Issues Price Some
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
BENJAMIN GRAHAM

Ignorance Loss Typical
Investing isn’t about beating others at their game. It’s about controlling yourself at your own game.
BENJAMIN GRAHAM

Controlling Games Investing
To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks.
BENJAMIN GRAHAM

Investing Looks People
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.
BENJAMIN GRAHAM

Destiny Honey Milk Years
Many progressive economists insist that gold is now in essentially the same position as silver and that the arguments the simon-pure gold advocates use against the white metal can be directed with equal effect against their own fetish.
BENJAMIN GRAHAM

Arguments Gold Use White
In an ideal world, the intelligent investor would hold stocks only when they are cheap and sell them when they become overpriced, then duck into the bunker of bonds and cash until stocks again become cheap enough to buy.
BENJAMIN GRAHAM

Ducks Intelligent Investing
To establish the right price for a stock, the market must have adequate information, but it by no means follows that is the market has this information it will thereupon establish the right price.
BENJAMIN GRAHAM

Adequate Information Mean
In the short-run, the market is a voting machine – reflecting a voter-registration test that requires only money, not intelligence or emotional stability – but in the long- run, the market is a weighing machine.
BENJAMIN GRAHAM

Emotional Long Running
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
Always remember that market quotations are there for convenience, either to be taken advantage of or to be ignored.
BENJAMIN GRAHAM

Ignored Investing Taken
The intelligent investor should recognize that market panics can create great prices for good companies and good prices for great companies.
BENJAMIN GRAHAM

Intelligent Investing Panic
You must never delude yourself into thinking that you’re investing when you’re speculating.
BENJAMIN GRAHAM

Investing Speculating Thinking
To be an investor you must be a believer in a better tomorrow.
BENJAMIN GRAHAM

Believer Investing Tomorrow
Individuals who cannot master their emotions are ill-suited to profit from the investment process.
BENJAMIN GRAHAM

Emotion Investing Investment
The best values today are often found in the stocks that were once hot and have since gone cold.
BENJAMIN GRAHAM

Gone Hot Today

Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.

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Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.

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