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The intelligent investor is likely to need considerable will power to keep from following the crowd.

Benjamin Graham

There is no reason to feel any shame in hiring someone to pick stocks or mutual funds for you. But there’s one responsibility that you must never delegate. You, and no one but you, must investigate whether an adviser is trustworthy and charges reasonable fees.
BENJAMIN GRAHAM

Investing Responsibility Shame
The memory of the financial community is proverbially and distressingly short.
BENJAMIN GRAHAM

Community Investing Memories
Successful investment may become substantially a matter of techniques and criteria that are learnable, rather than the product of unique and incommunicable mental powers.
BENJAMIN GRAHAM

Successful Technique Unique
Buy not on optimism, but on arithmetic.
BENJAMIN GRAHAM

Intelligent Investing Optimism
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

Adequate Information Mean
An investor calculates what a stock is worth, based on the value of its businesses.
BENJAMIN GRAHAM

Business Investing Investors Values
Undervaluations caused by neglect or prejudice may persist for an inconveniently long time, and the same applies to inflated prices caused by over-enthusiasm or artificial stimulants.
BENJAMIN GRAHAM

Enthusiasm Long May Prejudice Time
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

Earning Mean Men Power Sure Use
THERE is widespread agreement among economists that abuse of credit constitutes one of the chief unwholesome elements in business booms and is mainly responsible for the ensuing crash and depression.
BENJAMIN GRAHAM

Abuse Agreement Credit
Nearly everyone interested in common stocks wants to be told by someone else what he thinks the market is going to do. The demand being there, it must be supplied.
BENJAMIN GRAHAM

Demand Thinking Want
Successful investing is about managing risk, not avoiding it.
BENJAMIN GRAHAM

Investing Risk Successful
Losing some money is an inevitable part of investing, and there’s nothing you can do to prevent it. But to be an intelligent investor, you must take responsibility for ensuring that you never lose most or all of your money.
BENJAMIN GRAHAM

Intelligent Investing Responsibility
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
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
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

Hope Money Time
The investor’s primary interest lies in acquiring and holding suitable securities at suitable prices.
BENJAMIN GRAHAM

Interest Lying Market Timing
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
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
Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.
BENJAMIN GRAHAM

Issues Portfolios Quality
The distinction between investment and speculation in common stocks has always been a useful one and its disappearance is cause for concern.
BENJAMIN GRAHAM

Causes Common Investing
The only thing you should do with pro forma earnings is ignore them.
BENJAMIN GRAHAM

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

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

Earning Investing Ratios
An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return.
BENJAMIN GRAHAM

Analysis Promise Safety
A defensive investor can always prosper by looking patiently and calmly through the wreckage of a bear market.
BENJAMIN GRAHAM

Bears Investing Wreckage
A speculator gambles that a stock will go up in price because somebody else will pay even more for it.
BENJAMIN GRAHAM

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

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The intelligent investor is likely to need considerable will power to keep from following the crowd.

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