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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.

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
Right
Least
Current
Investor
Wrong
Currents
Bargain
Values
Likely
Purchase
Idea
Issue
Bargains
Buyer
Process
Market
Arrogant
Foolhardy
Seems
Value
Judgement
Appraisal
May
Seem
Investors
Presupposes
Ideas
Issues
Sets
Buyers

More quotes by Benjamin Graham

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To establish the right price for a stock, the market must have adequate information, but it by no means follows that is the market has this information it will thereupon establish the right price.
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Successful investment may become substantially a matter of techniques and criteria that are learnable, rather than the product of unique and incommunicable mental powers.
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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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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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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.
Benjamin Graham
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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.
Benjamin Graham
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The sillier the market's behavior, the greater the opportunity for the business like investor.
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The correct attitude of the security analyst toward the stock market might well be that of a man toward his wife. He shouldn't pay too much attention to what the lady says, but he can't afford to ignore it entirely. That is pretty much the position that most of us find ourselves vis-à-vis the stock market.
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The ideal form of common stock analysis leads to a valuation of the issue which can be compared with the current price to determine whether or not the security is an attractive purchase.
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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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Thousands of people have tried, and the evidence is clear: The more you trade, the less you keep.
Benjamin Graham
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It must be fundamentally wrong to reduce production of food and fiber while one-third of our population is still ill fed and ill clothed.
Benjamin Graham
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The essence of investment management is the management of risks, not the management of returns.
Benjamin Graham
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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.
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.
Benjamin Graham
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The market is always making mountains out of molehills and exaggerating ordinary vicissitudes into major setbacks.
Benjamin Graham
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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.
Benjamin Graham
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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.
Benjamin Graham
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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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In an ideal world, the intelligent investor would hold stocks only when they are cheap and sell them when they become overpriced, then duck into the bunker of bonds and cash until stocks again become cheap enough to buy.
Benjamin Graham