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High valuations entail high risks.

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
Risk
High
Valuations
Entail
Valuation
Risks
Investing

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Always remember that market quotations are there for convenience, either to be taken advantage of or to be ignored.
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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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Before you invest, you must ensure that you have realistically assessed your probability of being right and how you will react to the consequences of being wrong.
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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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Unusually rapid growth cannot keep up forever when a company has already registered a brilliant expansion, its very increase in size makes a repetition of its achievement more difficult.
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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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Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.
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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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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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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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Price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal.
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The sillier the market's behavior, the greater the opportunity for the business like investor.
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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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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 only thing you should do with pro forma earnings is ignore them.
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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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Buy when most people, including experts, are pessimistic, and sell when they are actively optimistic.
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The qualitative factors upon which most stress is laid are the nature of the business and the character of the management. These elements are exceedingly important, but they are also exceedingly difficult to deal with intelligently.
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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).
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