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The distinction between investment and speculation in common stocks has always been a useful one and its disappearance is cause for concern.

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
Distinction
Investing
Useful
Investment
Concern
Cause
Disappearance
Causes
Stocks
Common
Speculation

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In the world of securities, courage becomes the supreme virtue after adequate knowledge and a tested judgment are at hand.
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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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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.
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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.
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you may take it as an axiom that you cannot profit in Wall Street by continuously doing the obvious or the popular thing
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... the loss of public confidence in the financial community growing out of its own conduct in recent years. I insist that more damage has been done to stock values and to the future of equities from inside Wall Street than from outside Wall Street.
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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.
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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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Stock speculation is largely a matter of A trying to decide what B, C and D are likely to think-with B, C and D trying to do the same.
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People who invest make money for themselves people who speculate make money for their brokers. And that, in turn, is why Wall Street perennially downplays the durable virtues of investing and hypes the gaudy appeal of speculation.
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Good managements produce a good average market price, and bad managements produce bad market prices.
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The only thing you should do with pro forma earnings is ignore them.
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There is no reason to feel any shame in hiring someone to pick stocks or mutual funds for you. But there's one responsibility that you must never delegate. You, and no one but you, must investigate whether an adviser is trustworthy and charges reasonable fees.
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Nothing important on Wall Street can be counted on to occur exactly in the same way as it happened before.
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An intelligent investor gets satisfaction from the thought that his operations are exactly opposite to those of the crowd.
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