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Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.

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
Investing
Avoid
Unless
Second
Issues
Demonstrable
Quality
Portfolio
Making
Portfolios
Bargains

More quotes by Benjamin Graham

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Mr. Market does not always price stocks the way an appraiser or a private buyer would value a business. Instead, when stocks are going up, he happily pays more than their objective value and, when they are going down, he is desperate to dump them for less than their true worth.
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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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Always buy your straw hats in the Winter
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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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I am more and more impressed with the possibilities of history's repeating itself on many different counts. You don't get very far in Wall Street with the simple, convenient conclusion that a given level of prices is not too high.
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Individuals who cannot master their emotions are ill-suited to profit from the investment process.
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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.
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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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Both individual skill (art) and chance are important factors in determining success or failure.
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Thousands of people have tried, and the evidence is clear: The more you trade, the less you keep.
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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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Even the most conservative must realize that the recent transformation of surplus from an individual to a national disaster implies a scathing indictment of our capitalist system as it has now developed.
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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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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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The thing that I have been emphasizing in my own work for the last few years has been the group approach. To try to buy groups of stocks that meet some simple criterion for being undervalued-regardless of the industry and with very little attention to the individual company.
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In the short run, the market is a voting machine, but in the long run it is a weighing machine.
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If you are shopping for common stocks, choose them the way you would buy groceries, not the way you would buy perfume.
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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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The essence of investment management is the management of risks, not the management of returns.
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The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). The intelligent investor is a realist who sells to optimists and buys from pessimists.
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