Quote

The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). The intelligent investor is a realist who sells to optimists and buys from pessimists.

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
Investors
Investor
Optimism
Stocks
Pessimists
Expensive
Realist
Unjustified
Sells
Pessimist
Optimists
Market
Pessimism
Unsustainable
Intelligent
Optimist
Pendulums
Forever
Swings
Pendulum
Makes
Cheap
Buys

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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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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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The investor's chief problem - and even his worst enemy - is likely to be himself.
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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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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 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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In nine companies out of ten the factor of fluctuation has been a more dominant and important consideration in the matter of investment than has the factor of long-term growth or decline
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Though business conditions may change, corporations and securities may change, and financial institutions and regulations may change, human nature remains the same. Thus the important and difficult part of sound investment, which hinges upon the investor's own temperament and attitude, is not much affected by the passing years.
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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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Good managements produce a good average market price, and bad managements produce bad market prices.
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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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The chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions.
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Both individual skill (art) and chance are important factors in determining success or failure.
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The market is always making mountains out of molehills and exaggerating ordinary vicissitudes into major setbacks.
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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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The beauty of periodic rebalancing is that it forces you to base your investing decisions on a simple, objective standard.
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Every corporate security may be best viewed, in the first instance, as an ownership interest in, or a claim against, a specific business enterprise.
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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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Successful investing is about managing risk, not avoiding it.
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Always buy your straw hats in the Winter
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