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Never buy a stock immediately after a substantial rise or sell one immediately after a substantial drop.

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
Immediately
Sell
Sells
Rise
Never
Substantial
Stock
Drop

More quotes by Benjamin Graham

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The chief obstacle to success lies in the stubborn fact that if the favorable prospects of a concern are clearly apparent they are almost always reflected already in the current price of the stock. Buying such an issue is like betting on a topheavy favorite in a horse race. The chances may be on your side, but the real odds are against you.
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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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Even defensive portfolios should be changed from time to time, especially if the securities purchased have an apparently excessive advance and can be replaced by issues much more reasonable priced.
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We define a bargain issue as one which, on the basis of facts established by analysis, appears to be worth considerably more that it is selling for.
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Both individual skill (art) and chance are important factors in determining success or failure.
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The only thing you should do with pro forma earnings is ignore them.
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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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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.
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The individual investor should act consistently as an investor and not as a speculator. This means ... that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money's worth for his purchase.
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Diversification is an established tenet of conservative investment.
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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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Mr. Market's job is to provide you with prices your job is to decide whether it is to your advantage to act on them. You no not have to trade with hime just because he constantly begs you to.
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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 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 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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In other words, the market is not a weighing machine, on which the value of each issue is recorded by an exact and impersonal mechanism, in accordance with its specific qualities. Rather should we say that the market is a voting machine, whereon countless individuals register choices which are the product partly of reason and partly of emotion.
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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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Good managements produce a good average market price, and bad managements produce bad market prices.
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In the world of securities, courage becomes the supreme virtue after adequate knowledge and a tested judgment are at hand.
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The purchase of a bargain issue presupposes that the market's current appraisal is wrong, or at least that the buyer's idea of value is more likely to be right than the market's. In this process the investor sets his judgement against that of the market. To some this may seem arrogant or foolhardy.
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