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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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Benjamin Graham
Age: 82 †
Born: 1894
Born: May 8
Died: 1976
Died: September 21
Economist
Financier
Investor
University Teacher
Writer
London
England
Facts
Investing
Analysis
Basis
Considerably
Selling
Bargain
Bases
Bargains
Issue
Established
Worth
Appears
Issues
Define

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It is a fact worth pondering that four centuries ago the evil of an abundance or surplus arose from its being kept off the market, while today the evil of surplus lies in its being thrown upon the market.
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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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In nine companies out of ten the factor of fluctuation has been a more dominant and important consideration in the matter of investment than has the factor of long-term growth or decline
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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.
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At heart, uncertainty and investing are synonyms.
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Buy when most people, including experts, are pessimistic, and sell when they are actively optimistic.
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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.
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It's nonsensical to derive a price/earnings ratio by dividing the known current price by unknown future earnings.
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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 best values today are often found in the stocks that were once hot and have since gone cold.
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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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Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.
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When somebody asserts that a stock has an earning power of so much, I am sure that the person who hears him doesn't know what he means, and there is a good chance that the man who uses it doesn't know what it means.
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It should be remembered that a decline of 50% fully offsets a preceding advance of 100%.
Benjamin Graham
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Nothing important on Wall Street can be counted on to occur exactly in the same way as it happened before.
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.
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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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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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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.
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The best way to measure your investing success is not by whether you're beating the market but by whether you've put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.
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