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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

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
The stock market resembles a huge laundry in which institutions take in large blocks of each others washing … without rhyme or reason.
BENJAMIN GRAHAM

Block Investing Laundry
Every corporate security may be best viewed, in the first instance, as an ownership interest in, or a claim against, a specific business enterprise.
BENJAMIN GRAHAM

Firsts May Ownership
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
To enjoy a reasonable chance for continued better than average results, the investor must follow policies which are (1) inherently sound and promising, and (2) not popular on Wall Street.
BENJAMIN GRAHAM

Average Sound Wall
A speculator gambles that a stock will go up in price because somebody else will pay even more for it.
BENJAMIN GRAHAM

Investing Pay Speculators
Whenever the investor sold out in an upswing as soon as the top level of the previous well-recognized bull market was reached, he had a chance in the next bear market to buy back at one third (or better) below his selling price.
BENJAMIN GRAHAM

Bulls Levels Next
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
Undervaluations caused by neglect or prejudice may persist for an inconveniently long time, and the same applies to inflated prices caused by over-enthusiasm or artificial stimulants.
BENJAMIN GRAHAM

Enthusiasm Long May Prejudice Time
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.
BENJAMIN GRAHAM

Cost Depression Financial Great
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
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
Diversification is an established tenet of conservative investment.
BENJAMIN GRAHAM

Conservative Investing Investment
Never buy a stock immediately after a substantial rise or sell one immediately after a substantial drop.
BENJAMIN GRAHAM

Drop Sells Stock Substantial
It’s nonsensical to derive a price/earnings ratio by dividing the known current price by unknown future earnings.
BENJAMIN GRAHAM

Earning Investing Ratios
Buy not on optimism, but on arithmetic.
BENJAMIN GRAHAM

Intelligent Investing Optimism
there is a tendency in part of Wall Street people to pay excessive attention to the most recent figures and the present financial picture.
BENJAMIN GRAHAM

Attention People Wall
An intelligent investor gets satisfaction from the thought that his operations are exactly opposite to those of the crowd.
BENJAMIN GRAHAM

Intelligent Investing Opposites
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
Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble… to give way to hope, fear and greed.
BENJAMIN GRAHAM

Hope Money Time
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
While enthusiasm may be necessary for great accomplishments elsewhere, on Wall Street it almost invariably leads to disaster
BENJAMIN GRAHAM

Accomplishment Investing Wall
The thing that I have been emphasizing in my own work for the last few years has been the group approach. To try to buy groups of stocks that meet some simple criterion for being undervalued-regardless of the industry and with very little attention to the individual company.
BENJAMIN GRAHAM

Simple Trying Years
Why should the cotton growers suffer if there is shortage of wheat?
BENJAMIN GRAHAM

Cotton Suffering Wheat
Successful investing professionals are disciplined and consistent and they think a great deal about what they do and how they do it.
BENJAMIN GRAHAM

Investing Successful Thinking
Traditionally the investor has been the man with patience and the courage of his convictions who would buy when the harried or disheartened speculator was selling.
BENJAMIN GRAHAM

Investing Men Selling
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

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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