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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

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
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
It is no difficult trick to bring a great deal of energy, study, and native ability into Wall Street and to end up with losses instead of profits. These virtues, if channeled in the wrong directions, become indistinguishable from handicaps.
BENJAMIN GRAHAM

Energy Loss Wall
In security analysis the prime stress is laid upon protection against untoward events. We obtain this protection by insisting upon margins of safety, or values well in excess of the price paid.
BENJAMIN GRAHAM

Events Safety Stress
It should be remembered that a decline of 50% fully offsets a preceding advance of 100%.
BENJAMIN GRAHAM

Decline Investing Should
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
An investor calculates what a stock is worth, based on the value of its businesses.
BENJAMIN GRAHAM

Business Investing Investors Values
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
The investor should be aware that even though safety of its principal and interest may be unquestioned, a long term bond could vary widely in market price in response to changes in interest rates.
BENJAMIN GRAHAM

Investing Long Safety
Speculative stock movements are carried too far in both directions, frequently in the general market and at all times in at least some of the individual issues.
BENJAMIN GRAHAM

Investing Issues Movement
Nearly everyone interested in common stocks wants to be told by someone else what he thinks the market is going to do. The demand being there, it must be supplied.
BENJAMIN GRAHAM

Demand Thinking Want
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 best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.
BENJAMIN GRAHAM

Discipline Financial Plan Want Way
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
The best values today are often found in the stocks that were once hot and have since gone cold.
BENJAMIN GRAHAM

Gone Hot Today
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

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.

Related Topics

Popular Authors

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