High valuations entail high risks.
BENJAMIN GRAHAMIn an ideal world, the intelligent investor would hold stocks only when they are cheap and sell them when they become overpriced, then duck into the bunker of bonds and cash until stocks again become cheap enough to buy.
More Benjamin Graham Quotes
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Whenever the investor sold out in an upswing as soon as the top level of the previous well-recognized bull market was reached, he had a chance in the next bear market to buy back at one third (or better) below his selling price.
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The true investor… will do better if he forgets about the stock market and pays attention to his dividend returns and to the operation results of his companies.
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Successful investing professionals are disciplined and consistent and they think a great deal about what they do and how they do it.
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It should be remembered that a decline of 50% fully offsets a preceding advance of 100%.
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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.
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Obvious prospects for physical growth in a business do not translate into obvious profits for investors.
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Price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal.
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Investing isn’t about beating others at their game. It’s about controlling yourself at your own game.
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While enthusiasm may be necessary for great accomplishments elsewhere, on Wall Street it almost invariably leads to disaster
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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.
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Individuals who cannot master their emotions are ill-suited to profit from the investment process.
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It is no difficult trick to bring a great deal of energy, study, and native ability into Wall Street and to end up with losses instead of profits. These virtues, if channeled in the wrong directions, become indistinguishable from handicaps.
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The world has not learned the technique of balanced expansion without the resultant commercial and financial congestion.
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there is a tendency in part of Wall Street people to pay excessive attention to the most recent figures and the present financial picture.
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The memory of the financial community is proverbially and distressingly short.
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It is a fact worth pondering that four centuries ago the evil of “an abundance or surplus” arose from its being kept off the market, while today the evil of surplus lies in its being thrown upon the market.
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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.
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In the short run, the market is a voting machine, but in the long run it is a weighing machine.
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We define a bargain issue as one which, on the basis of facts established by analysis, appears to be worth considerably more that it is selling for.
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To see how much a company is truly earning on the capital it deploys in its businesses, look beyond EPS to Return on Invested Capital (ROIC).
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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.
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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.
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Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.
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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.
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Never mingle your speculative and investment operations in the same account nor in any part of your thinking.
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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