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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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Benjamin Graham
Age: 82 †
Born: 1894
Born: May 8
Died: 1976
Died: September 21
Economist
Financier
Investor
University Teacher
Writer
London
England
Unknown
Nonsensical
Currents
Ratio
Investing
Earnings
Price
Ratios
Known
Derive
Future
Dividing
Earning
Current
More quotes by Benjamin Graham
In other words, the market is not a weighing machine, on which the value of each issue is recorded by an exact and impersonal mechanism, in accordance with its specific qualities. Rather should we say that the market is a voting machine, whereon countless individuals register choices which are the product partly of reason and partly of emotion.
Benjamin Graham
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.
Benjamin Graham
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.
Benjamin Graham
Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.
Benjamin Graham
The essence of investment management is the management of risks, not the management of returns.
Benjamin Graham
The intelligent investor is a realist who sells to optimists and buys from pessimists.
Benjamin Graham
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.
Benjamin Graham
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.
Benjamin Graham
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.
Benjamin Graham
An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return.
Benjamin Graham
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
Diversification is an established tenet of conservative investment.
Benjamin Graham
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
Many progressive economists insist that gold is now in essentially the same position as silver and that the arguments the simon-pure gold advocates use against the white metal can be directed with equal effect against their own fetish.
Benjamin Graham
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.
Benjamin Graham
Always remember that market quotations are there for convenience, either to be taken advantage of or to be ignored.
Benjamin Graham
The money cost of the reservoir plan literally fades into insignificance when it is compared with the financial burden which the great depression imposed on the nation.
Benjamin Graham
It should be remembered that a decline of 50% fully offsets a preceding advance of 100%.
Benjamin Graham
The investor's chief problem - and even his worst enemy - is likely to be himself.
Benjamin Graham
Successful investing is about managing risk, not avoiding it.
Benjamin Graham
