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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

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Benjamin Graham
Age: 82 †
Born: 1894
Born: May 8
Died: 1976
Died: September 21
Economist
Financier
Investor
University Teacher
Writer
London
England
Money
Price
Irrational
Speculate
Give
Consequence
Professors
Ingrained
Giving
Financial
Finance
Gamer
Way
Subject
Tendency
Stocks
Time
Subjects
Tendencies
Excessive
People
Common
Greed
Gamble
Hope
Investing
Directions
Fluctuations
Fear
Investment
Speculation
Fluctuation

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The sillier the market's behavior, the greater the opportunity for the business like investor.
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Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.
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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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Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of good business conditions. The purchasers view the good current earnings as equivalent to 'earning power' and assume that prosperity is equivalent to safety.
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Unusually rapid growth cannot keep up forever when a company has already registered a brilliant expansion, its very increase in size makes a repetition of its achievement more difficult.
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Many progressive economists insist that gold is now in essentially the same position as silver and that the arguments the simon-pure gold advocates use against the white metal can be directed with equal effect against their own fetish.
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Only in the exceptional case, where the integrity and competence of the advisers have been thoroughly demonstrated, should the investor act upon the advice of others without understanding and approving the decision made.
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An intelligent investor gets satisfaction from the thought that his operations are exactly opposite to those of the crowd.
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In 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.
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Both individual skill (art) and chance are important factors in determining success or failure.
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We urge the beginner in security buying not to waste his efforts and his money in trying to beat the market. Let him study security values and initially test out his judgment on price versus value with the smallest possible sums.
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Buy when most people, including experts, are pessimistic, and sell when they are actively optimistic.
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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.
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Abnormally good or abnormally bad conditions do not last forever.
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The intelligent investor should recognize that market panics can create great prices for good companies and good prices for great companies.
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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.
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