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It’s nonsensical to derive a price/earnings ratio by dividing the known current price by unknown future earnings.

Benjamin Graham

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

Intelligent Investing Realist
The investor’s chief problem – and even his worst enemy – is likely to be himself.
BENJAMIN GRAHAM

Enemy Greed Money Worst
Never buy a stock because it has gone up or sell one because it has gone down.
BENJAMIN GRAHAM

Gone Investing Sell
Before you invest, you must ensure that you have realistically assessed your probability of being right and how you will react to the consequences of being wrong.
BENJAMIN GRAHAM

Being Investing Probability Wrong
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
There is a close logical connection between the concept of a safety margin and the principle of diversification.
BENJAMIN GRAHAM

Investing Principles Safety
To have a true investment, there must be a true margin of safety. And a true margin of safety is one that can be demonstrated by figures, by persuasive reasoning, and by reference to a body of actual experience.
BENJAMIN GRAHAM

Body Investment Safety
Both individual skill (art) and chance are important factors in determining success or failure.
BENJAMIN GRAHAM

Art Important Skills
The people of the United States will not tolerate another deep depression that arises not from any lack of natural resources, productive capacity or man and brain power, but solely from imperfections in the functioning of the system of finance capitalism.
BENJAMIN GRAHAM

Imperfection Men People
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
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
Most businesses change in character and quality over the years, sometimes for the better, perhaps more often for the worse. The investor need not watch his companies’ performance like a hawk; but he should give it a good, hard look from time to time.
BENJAMIN GRAHAM

Character Giving Years
Never buy a stock immediately after a substantial rise or sell one immediately after a substantial drop.
BENJAMIN GRAHAM

Drop Sells Stock Substantial
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
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

Average Current Past Price Years

It’s nonsensical to derive a price/earnings ratio by dividing the known current price by unknown future earnings.

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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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Popular Authors

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