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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.

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
Intelligent
Confronted
Challenges
Margins
Secret
Motto
Sound
Venture
Words
Investing
Three
Investment
Safety
Distill
Challenge
Margin

More quotes by Benjamin Graham

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Abnormally good or abnormally bad conditions do not last forever.
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Always remember that market quotations are there for convenience, either to be taken advantage of or to be ignored.
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Why should the cotton growers suffer if there is shortage of wheat?
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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.
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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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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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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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An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return.
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The investor with a portfolio of sound stocks should expect their prices to fluctuate and should neither be concerned by sizable declines nor become excited by sizable advances. He should always remember that market quotations are there for his convenience, either to be taken advantage of or to be ignored.
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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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It is absurd to think that the general public can ever make money out of market forecasts.
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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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You must never delude yourself into thinking that you're investing when you're speculating.
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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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The investor's primary interest lies in acquiring and holding suitable securities at suitable prices.
Benjamin Graham
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Wall Street has a few prudent principles the trouble is that they are always forgotten when they are most needed.
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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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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.
Benjamin Graham
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Individuals who cannot master their emotions are ill-suited to profit from the investment process.
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The thing that I have been emphasizing in my own work for the last few years has been the group approach. To try to buy groups of stocks that meet some simple criterion for being undervalued-regardless of the industry and with very little attention to the individual company.
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