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There is a close logical connection between the concept of a safety margin and the principle of diversification.

Benjamin Graham

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

Earning Investing Ratios
The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). The intelligent investor is a realist who sells to optimists and buys from pessimists.
BENJAMIN GRAHAM

Intelligent Optimism Swings
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
Even defensive portfolios should be changed from time to time, especially if the securities purchased have an apparently excessive advance and can be replaced by issues much more reasonable priced.
BENJAMIN GRAHAM

Investing Issues Portfolio Purchase
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
Price statistics show clearly that instability in raw-material prices is a prime cause of instability of other prices.
BENJAMIN GRAHAM

Causes Materials Raw Statistics
Investing is most intelligent when it is most businesslike.
BENJAMIN GRAHAM

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

Drop Sells Stock Substantial
The intelligent investor shouldn’t ignore Mr. Market entirely. Instead, you should do business with him- but only to the extent that it serves your interests.
BENJAMIN GRAHAM

Intelligent Investing Should
Although there are good and bad companies, there is no such thing as a good stock; there are only good stock prices, which come and go.
BENJAMIN GRAHAM

Bad Company Good Investing Price Stock
In the short-run, the market is a voting machine – reflecting a voter-registration test that requires only money, not intelligence or emotional stability – but in the long- run, the market is a weighing machine.
BENJAMIN GRAHAM

Emotional Long Running
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
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
If General Motors is worth $60 a share to an investor it must be because the full common-stock ownership of this gigantic enterprise as a whole is worth 43 million (shares) times $60, or no less than $2,600 million.
BENJAMIN GRAHAM

Common Ownership Share
The sillier the market’s behavior, the greater the opportunity for the business like investor.
BENJAMIN GRAHAM

Behavior Investing Opportunity
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

There is a close logical connection between the concept of a safety margin and the principle of diversification.

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There is a close logical connection between the concept of a safety margin and the principle of diversification.

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