Quote

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.

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
Market
Efforts
Beginner
Money
Waste
Buying
Sums
Trying
Judgment
Investing
Beginners
Value
Test
Initially
Security
Beat
Urge
Study
Price
Versus
Effort
Tests
Urges
Possible
Beats
Smallest

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High valuations entail high risks.
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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.
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Wall Street has a few prudent principles the trouble is that they are always forgotten when they are most needed.
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Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.
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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.
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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.
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Never buy a stock immediately after a substantial rise or sell one immediately after a substantial drop.
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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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If we assume that there are normal or standard income results to be obtained from investing money in securities, then the role of the adviser can be more readily established. He will use his superior training and experience to protect his clients against mistakes and to make sure that they obtain the results to which their money is entitled.
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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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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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An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return.
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The beauty of periodic rebalancing is that it forces you to base your investing decisions on a simple, objective standard.
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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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Successful investing professionals are disciplined and consistent and they think a great deal about what they do and how they do it.
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A stock is not just a ticker symbol or an electronic blip it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.
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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.
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