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 GRAHAMAn intelligent investor gets satisfaction from the thought that his operations are exactly opposite to those of the crowd.
More Benjamin Graham Quotes
-
-
It’s nonsensical to derive a price/earnings ratio by dividing the known current price by unknown future earnings.
BENJAMIN GRAHAM -
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 -
The world has not learned the technique of balanced expansion without the resultant commercial and financial congestion.
BENJAMIN GRAHAM -
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 -
Stocks can be dynamite.
BENJAMIN GRAHAM -
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 -
The investor’s chief problem – and even his worst enemy – is likely to be himself.
BENJAMIN GRAHAM -
A speculator gambles that a stock will go up in price because somebody else will pay even more for it.
BENJAMIN GRAHAM -
The essence of investment management is the management of risks, not the management of returns.
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 -
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 -
Stock speculation is largely a matter of A trying to decide what B, C and D are likely to think-with B, C and D trying to do the same.
BENJAMIN GRAHAM -
It is absurd to think that the general public can ever make money out of market forecasts.
BENJAMIN GRAHAM -
When somebody asserts that a stock has an earning power of so much, I am sure that the person who hears him doesn’t know what he means, and there is a good chance that the man who uses it doesn’t know what it means.
BENJAMIN GRAHAM -
Why should the cotton growers suffer if there is shortage of wheat?
BENJAMIN GRAHAM