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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

The defensive (or passive) investor will place chief emphasis on the avoidance of serious mistakes or losses. His second aim will be freedom from effort, annoyance, and the need for making frequent decisions.
BENJAMIN GRAHAM

Effort Loss Mistakes
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
The volume of credit depends upon three factors: the desire to borrow, the ability to lend and the desire to lend.
BENJAMIN GRAHAM

Credit Desire Three
The true investor… will do better if he forgets about the stock market and pays attention to his dividend returns and to the operation results of his companies.
BENJAMIN GRAHAM

Attention Investing Pay
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 intelligent investor is likely to need considerable will power to keep from following the crowd.
BENJAMIN GRAHAM

Crowd Following Intelligent Needs
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
Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.
BENJAMIN GRAHAM

Challenges Intelligent Safety
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
Do not let anyone else run your business
BENJAMIN GRAHAM

Anyone Buisness Else Running
In the financial markets, hindsight is forever 20/20, but foresight is legally blind. And thus, for most investors, market timing is a practical and emotional impossibility.
BENJAMIN GRAHAM

Emotional Forever Investing
Nothing important on Wall Street can be counted on to occur exactly in the same way as it happened before.
BENJAMIN GRAHAM

Important Investing Wall
Rather should we say that the market is a voting machine, whereon countless individuals register choices which are the product partly of reason and partly of emotion.
BENJAMIN GRAHAM

Countless Emotion Party Rather
Buy not on optimism, but on arithmetic.
BENJAMIN GRAHAM

Intelligent Investing Optimism
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.
BENJAMIN GRAHAM

Destiny Discipline Swings
Experience teaches that the time to buy stocks is when their price is unduly depressed by temporary adversity. In other words, they should be bought on a bargain basis or not at all.
BENJAMIN GRAHAM

Adversity Should Teach

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.

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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.

Related Topics

Popular Authors

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