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 GRAHAMI am more and more impressed with the possibilities of history’s repeating itself on many different counts. You don’t get very far in Wall Street with the simple, convenient conclusion that a given level of prices is not too high.
More Benjamin Graham Quotes
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… the loss of public confidence in the financial community growing out of its own conduct in recent years. I insist that more damage has been done to stock values and to the future of equities from inside Wall Street than from outside Wall Street.
BENJAMIN GRAHAM -
The chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions.
BENJAMIN GRAHAM -
Diversification is an established tenet of conservative investment.
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 -
Nothing important on Wall Street can be counted on to occur exactly in the same way as it happened before.
BENJAMIN GRAHAM -
Mr. Market’s job is to provide you with prices; your job is to decide whether it is to your advantage to act on them. You no not have to trade with hime just because he constantly begs you to.
BENJAMIN GRAHAM -
I quickly convinced myself that the true key to material happiness lay in a modest standard of living which could be achieved with little difficulty under almost all economic conditions.
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 essence of investment management is the management of risks, not the management of returns.
BENJAMIN GRAHAM -
The distinction between investment and speculation in common stocks has always been a useful one and its disappearance is cause for concern.
BENJAMIN GRAHAM -
Good managements produce a good average market price, and bad managements produce bad market prices.
BENJAMIN GRAHAM -
The purpose of this book is to supply, in the form suitable for laymen, guidance in the adoption and execution of an investment policy.
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 -
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 -
No matter how careful you are, the one risk no investor can ever eliminate is the risk of being wrong. Only by insisting on what Graham called the “margin of safety” – never overpaying, no matter how exciting an investment seems to be – can you minimize your odds of error.
BENJAMIN GRAHAM