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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
Risks
Investing
Risk
High
Valuations
Entail
Valuation

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You must never delude yourself into thinking that you're investing when you're speculating.
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Successful investing is about managing risk, not avoiding it.
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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.
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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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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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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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A defensive investor can always prosper by looking patiently and calmly through the wreckage of a bear market.
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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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It should be remembered that a decline of 50% fully offsets a preceding advance of 100%.
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It requires strength of character in order to think and to act in opposite fashion from the crowd and also patience to wait for opportunities that may be spaced years apart.
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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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Individuals who cannot master their emotions are ill-suited to profit from the investment process.
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Mr. Market's job is to provide you with prices your job is to decide whether it is to your advantage to act on them. You no not have to trade with hime just because he constantly begs you to.
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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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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
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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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Price statistics show clearly that instability in raw-material prices is a prime cause of instability of other prices.
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The value of the security analyst to the investor depends largely on the investor's own attitude. If the investor asks the analyst the right questions, he is likely to get the right or at least valuable answers.
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Why should the cotton growers suffer if there is shortage of wheat?
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Do not let anyone else run your business
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