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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
Hope
Investing
Directions
Fluctuations
Fear
Investment
Speculation
Fluctuation
Money
Price
Irrational
Speculate
Give
Consequence
Professors
Ingrained
Giving
Financial
Finance
Gamer
Way
Subject
Tendency
Stocks
Time
Subjects
Tendencies
Excessive
People
Common
Greed
Gamble

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The beauty of periodic rebalancing is that it forces you to base your investing decisions on a simple, objective standard.
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The ideal form of common stock analysis leads to a valuation of the issue which can be compared with the current price to determine whether or not the security is an attractive purchase.
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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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Always buy your straw hats in the Winter
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Thousands of people have tried, and the evidence is clear: The more you trade, the less you keep.
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There is a close logical connection between the concept of a safety margin and the principle of diversification.
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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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you may take it as an axiom that you cannot profit in Wall Street by continuously doing the obvious or the popular thing
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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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A defensive investor can always prosper by looking patiently and calmly through the wreckage of a bear market.
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Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.
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Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.
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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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The investor should be aware that even though safety of its principal and interest may be unquestioned, a long term bond could vary widely in market price in response to changes in interest rates.
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It should be remembered that a decline of 50% fully offsets a preceding advance of 100%.
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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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Mr. Market does not always price stocks the way an appraiser or a private buyer would value a business. Instead, when stocks are going up, he happily pays more than their objective value and, when they are going down, he is desperate to dump them for less than their true worth.
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The defensive (or passive) investor will place chief emphasis on the avoidance of serious mistakes or losses. His second aim will be freedom from effort, annoyance, and the need for making frequent decisions.
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The investor has a right to expect good results to flow from a consistent and courageous application of the principle of buying after the market has declined substantially and selling after it has had a spectacular rise. But he cannot expect to reduce this principle to a simple and foolproof formula, with profits guaranteed and no anxious periods.
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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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