Quote

In the short run, the market is a voting machine, but in the long run it is a weighing machine.

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
Short
Voting
Business
Classic
Running
Machine
Long
Investing
Investment
Machines
Buffets
Market
Weighing
Intelligent
Investors

More quotes by Benjamin Graham

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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 beauty of periodic rebalancing is that it forces you to base your investing decisions on a simple, objective standard.
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The sillier the market's behavior, the greater the opportunity for the business like investor.
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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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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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Wall Street has a few prudent principles the trouble is that they are always forgotten when they are most needed.
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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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The stock market resembles a huge laundry in which institutions take in large blocks of each others washing ... without rhyme or reason.
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Even the most conservative must realize that the recent transformation of surplus from an individual to a national disaster implies a scathing indictment of our capitalist system as it has now developed.
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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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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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I am more and more impressed with the possibilities of history's repeating itself on many different counts. You don't get very far in Wall Street with the simple, convenient conclusion that a given level of prices is not too high.
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The best values today are often found in the stocks that were once hot and have since gone cold.
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The investor's chief problem - and even his worst enemy - is likely to be himself.
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There is a close logical connection between the concept of a safety margin and the principle of diversification.
Benjamin Graham
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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.
Benjamin Graham
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Price statistics show clearly that instability in raw-material prices is a prime cause of instability of other prices.
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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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No matter how careful you are, the one risk no investor can ever eliminate is the risk of being wrong. Only by insisting on what Graham called the margin of safety - never overpaying, no matter how exciting an investment seems to be - can you minimize your odds of error.
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Never mingle your speculative and investment operations in the same account nor in any part of your thinking.
Benjamin Graham