Quote

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.

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
Always
Expect
Prices
Declines
Advantage
Ignored
Portfolio
Concerned
Investors
Portfolios
Either
Decline
Investor
Taken
Investing
Stocks
Sound
Excited
Advances
Become
Market
Quotations
Sizable
Remember
Neither
Convenience
Fluctuate

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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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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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The investor's primary interest lies in acquiring and holding suitable securities at suitable prices.
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It's nonsensical to derive a price/earnings ratio by dividing the known current price by unknown future earnings.
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High valuations entail high risks.
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It should be remembered that a decline of 50% fully offsets a preceding advance of 100%.
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Successful investing professionals are disciplined and consistent and they think a great deal about what they do and how they do it.
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Cartels have spread and will spread as long as the world lacks an effective mechanism by which balanced expansion may be achieved without a resulting disruption of prices.
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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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Before you place your financial future in the hands of an adviser, it's imperative that you find someone who not only makes you comfortable but whose honesty is beyond reproach.
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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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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 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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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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Buy when most people, including experts, are pessimistic, and sell when they are actively optimistic.
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Many progressive economists insist that gold is now in essentially the same position as silver and that the arguments the simon-pure gold advocates use against the white metal can be directed with equal effect against their own fetish.
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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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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 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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The beauty of periodic rebalancing is that it forces you to base your investing decisions on a simple, objective standard.
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