Quote

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.

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
National
Surplus
Realize
Implies
Realizing
Recent
System
Capitalist
Individual
Developed
Must
Transformation
Even
Disaster
Scathing
Conservative
Indictment

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The essence of investment management is the management of risks, not the management of returns.
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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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It should be remembered that a decline of 50% fully offsets a preceding advance of 100%.
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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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The sillier the market's behavior, the greater the opportunity for the business like investor.
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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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Successful investing is about managing risk, not avoiding it.
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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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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 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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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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Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed.
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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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An investor calculates what a stock is worth, based on the value of its businesses.
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When somebody asserts that a stock has an earning power of so much, I am sure that the person who hears him doesn't know what he means, and there is a good chance that the man who uses it doesn't know what it means.
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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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It always seemed, and still seems, ridiculously simple to say that if one can acquire a diversified group of common stocks at a price less than the applicable net current assets alone - after deducting all prior claims, and counting as zero the fixed and other assets - the results should be quite satisfactory.
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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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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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Both individual skill (art) and chance are important factors in determining success or failure.
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