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The genuine investor in common stocks does not need a great equipment of brain and knowledge, but he does need some unusual qualities of character

Benjamin Graham

High valuations entail high risks.
BENJAMIN GRAHAM

Investing Risk Valuation
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
The world has not learned the technique of balanced expansion without the resultant commercial and financial congestion.
BENJAMIN GRAHAM

Expansion Technique World
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
The stock market resembles a huge laundry in which institutions take in large blocks of each others washing … without rhyme or reason.
BENJAMIN GRAHAM

Block Investing Laundry
Successful investing professionals are disciplined and consistent and they think a great deal about what they do and how they do it.
BENJAMIN GRAHAM

Investing Successful Thinking
Knowledge is only one ingredient on arriving at a stock’s proper price. The other ingredient, fully as important as information, is sound judgment.
BENJAMIN GRAHAM

Arriving Important Sound
Individuals who cannot master their emotions are ill-suited to profit from the investment process.
BENJAMIN GRAHAM

Emotion Investing Investment
It is worth pointing out that assuredly not more than one person out of a hundred who stayed in the market after after 1925 emerged from it with a net profit and that the speculative losses taken were appalling.
BENJAMIN GRAHAM

Hundred Loss Taken
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
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.
BENJAMIN GRAHAM

Fall Investing Opportunity
Thus the important and difficult part of sound investment, which hinges upon the investor’s own temperament and attitude, is not much affected by the passing years.
BENJAMIN GRAHAM

Affected Investment Passing Temperament Years
Always remember that market quotations are there for convenience, either to be taken advantage of or to be ignored.
BENJAMIN GRAHAM

Ignored Investing Taken
The underlying principles of sound investment should not alter from decade to decade, but the application of these principles must be adapted to significant changes in the financial mechanisms and climate.
BENJAMIN GRAHAM

Change Intelligent Significant Sound
The beauty of periodic rebalancing is that it forces you to base your investing decisions on a simple, objective standard.
BENJAMIN GRAHAM

Decision Investing Simple
While enthusiasm may be necessary for great accomplishments elsewhere, on Wall Street it almost invariably leads to disaster
BENJAMIN GRAHAM

Accomplishment Investing Wall
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
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.
BENJAMIN GRAHAM

Energy Loss Wall
Never mingle your speculative and investment operations in the same account nor in any part of your thinking.
BENJAMIN GRAHAM

Investing Investment Thinking
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
A great company is not a great investment if you pay too much for the stock.
BENJAMIN GRAHAM

Investing Much Pay Too
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 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
Buy when most people, including experts, are pessimistic, and sell when they are actively optimistic.
BENJAMIN GRAHAM

Experts Optimistic People
An investor calculates what a stock is worth, based on the value of its businesses.
BENJAMIN GRAHAM

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

Drop Sells Stock Substantial
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

The genuine investor in common stocks does not need a great equipment of brain and knowledge, but he does need some unusual qualities of character

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The genuine investor in common stocks does not need a great equipment of brain and knowledge, but he does need some unusual qualities of character

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