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Knowledge is only one ingredient on arriving at a stock's proper price. The other ingredient, fully as important as information, is sound judgment.

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
Information
Ingredient
Knowledge
Arriving
Sound
Ingredients
Important
Stock
Proper
Price
Fully
Judgment

More quotes by Benjamin Graham

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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.
Benjamin Graham
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Only in the exceptional case, where the integrity and competence of the advisers have been thoroughly demonstrated, should the investor act upon the advice of others without understanding and approving the decision made.
Benjamin Graham
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The investor has a right to expect good results to flow from a consistent and courageous application of the principle of buying after the market has declined substantially and selling after it has had a spectacular rise. But he cannot expect to reduce this principle to a simple and foolproof formula, with profits guaranteed and no anxious periods.
Benjamin Graham
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The intelligent investor is a realist who sells to optimists and buys from pessimists.
Benjamin Graham
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Why should the cotton growers suffer if there is shortage of wheat?
Benjamin Graham
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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.
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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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.
Benjamin Graham
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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.
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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Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of good business conditions. The purchasers view the good current earnings as equivalent to 'earning power' and assume that prosperity is equivalent to safety.
Benjamin Graham
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Always buy your straw hats in the Winter
Benjamin Graham
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Successful investing is about managing risk, not avoiding it.
Benjamin Graham
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Wall Street has a few prudent principles the trouble is that they are always forgotten when they are most needed.
Benjamin Graham
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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.
Benjamin Graham
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Have the courage of your knowledge and experience. If you have formed a conclusion from the facts and if you know your judgment is sound, act on it – even though others may hesitate or differ.
Benjamin Graham
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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.
Benjamin Graham
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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.
Benjamin Graham
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The chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions.
Benjamin Graham
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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.
Benjamin Graham