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It is a misfortune of the times that all of us must needs be amateur economists-including, and perhaps especially, the professionals.

Benjamin Graham

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 GRAHAM

Average Current Past Price Years
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

Adoption Book Purpose
Those with the enterprise lack the money and those with the money lack the enterprise to buy stocks when they are cheap.
BENJAMIN GRAHAM

Cheap Enterprise Enterprises Investing Stock
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
It must be fundamentally wrong to reduce production of food and fiber while one-third of our population is still ill fed and ill clothed.
BENJAMIN GRAHAM

Clothed Feds Fiber Population
The Reservoir system will function not only as an equalizer of business conditions, but also as a national store to meet further emergencies, such as war and drought, and-most important of all-as the concrete means of developing a steadily higher living standard for all.
BENJAMIN GRAHAM

Important Mean War
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
The qualitative factors upon which most stress is laid are the nature of the business and the character of the management. These elements are exceedingly important, but they are also exceedingly difficult to deal with intelligently.
BENJAMIN GRAHAM

Character Important Stress
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
Real investment risk is measured not by the percent that a stock may decline in price in relation to the general market in a given period, but by the danger of a loss of quality and earnings power through economic changes or deterioration in management.
BENJAMIN GRAHAM

Earning Loss Real Risk
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
As in roulette, same is true of the stock trader, who will find that the expense of trading weights the dice heavily against him.
BENJAMIN GRAHAM

Intelligent Investing Weight
Thousands of people have tried, and the evidence is clear: The more you trade, the less you keep.
BENJAMIN GRAHAM

Evidence Investing People
Speculative stock movements are carried too far in both directions, frequently in the general market and at all times in at least some of the individual issues.
BENJAMIN GRAHAM

Investing Issues Movement
Intelligent investment is more a matter of mental approach than it is of technique. A sound mental approach toward stock fluctuations is the touchstone of all successful investment under present-day conditions.
BENJAMIN GRAHAM

Intelligent Successful Technique
I 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.
BENJAMIN GRAHAM

Different Simple Wall

It is a misfortune of the times that all of us must needs be amateur economists-including, and perhaps especially, the professionals.

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It is a misfortune of the times that all of us must needs be amateur economists-including, and perhaps especially, the professionals.

Related Topics

Popular Authors

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