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An investor calculates what a stock is worth, based on the value of its businesses.

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
Values
Investor
Investors
Businesses
Stock
Investing
Based
Value
Worth
Calculates

More quotes by Benjamin Graham

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Never mingle your speculative and investment operations in the same account nor in any part of your thinking.
Benjamin Graham
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Do not let anyone else run your business
Benjamin Graham
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In the financial markets, hindsight is forever 20/20, but foresight is legally blind. And thus, for most investors, market timing is a practical and emotional impossibility.
Benjamin Graham
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Good managements produce a good average market price, and bad managements produce bad market prices.
Benjamin Graham
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It is no difficult trick to bring a great deal of energy, study, and native ability into Wall Street and to end up with losses instead of profits. These virtues, if channeled in the wrong directions, become indistinguishable from handicaps.
Benjamin Graham
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Mr. Market does not always price stocks the way an appraiser or a private buyer would value a business. Instead, when stocks are going up, he happily pays more than their objective value and, when they are going down, he is desperate to dump them for less than their true worth.
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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Speculators often prosper through ignorance it is a cliché that in a roaring bull market knowledge is superfluous and experience is a handicap. But the typical experience of the speculator is one of temporary profit and ultimate loss
Benjamin Graham
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Real investment risk is measured not by the percent that a stock may decline in price in relation to the general market in a given period, but by the danger of a loss of quality and earnings power through economic changes or deterioration in management.
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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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.
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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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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To see how much a company is truly earning on the capital it deploys in its businesses, look beyond EPS to Return on Invested Capital (ROIC).
Benjamin Graham
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It's nonsensical to derive a price/earnings ratio by dividing the known current price by unknown future earnings.
Benjamin Graham
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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.
Benjamin Graham
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The intelligent investor should recognize that market panics can create great prices for good companies and good prices for great companies.
Benjamin Graham
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A defensive investor can always prosper by looking patiently and calmly through the wreckage of a bear market.
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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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