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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).

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
Company
Invested
Look
Earning
Looks
Businesses
Much
Capital
Investing
Truly
Return
Beyond

More quotes by Benjamin Graham

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Always remember that market quotations are there for convenience, either to be taken advantage of or to be ignored.
Benjamin Graham
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It must be fundamentally wrong to reduce production of food and fiber while one-third of our population is still ill fed and ill clothed.
Benjamin Graham
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An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return.
Benjamin Graham
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Real investment risk is measured not by the percent that a stock may decline in price in relation to the general market in a given period, but by the danger of a loss of quality and earnings power through economic changes or deterioration in management.
Benjamin Graham
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People who invest make money for themselves people who speculate make money for their brokers. And that, in turn, is why Wall Street perennially downplays the durable virtues of investing and hypes the gaudy appeal of speculation.
Benjamin Graham
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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
Benjamin Graham
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The individual investor should act consistently as an investor and not as a speculator. This means ... that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money's worth for his purchase.
Benjamin Graham
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The essence of investment management is the management of risks, not the management of returns.
Benjamin Graham
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Cartels have spread and will spread as long as the world lacks an effective mechanism by which balanced expansion may be achieved without a resulting disruption of prices.
Benjamin Graham
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The only thing you should do with pro forma earnings is ignore them.
Benjamin Graham
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A stock is not just a ticker symbol or an electronic blip it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.
Benjamin Graham
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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
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Individuals who cannot master their emotions are ill-suited to profit from the investment process.
Benjamin Graham
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In the world of securities, courage becomes the supreme virtue after adequate knowledge and a tested judgment are at hand.
Benjamin Graham
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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.
Benjamin Graham
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An investor calculates what a stock is worth, based on the value of its businesses.
Benjamin Graham
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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.
Benjamin Graham
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Wall Street has a few prudent principles the trouble is that they are always forgotten when they are most needed.
Benjamin Graham
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The investor's chief problem - and even his worst enemy - is likely to be himself.
Benjamin Graham
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An intelligent investor gets satisfaction from the thought that his operations are exactly opposite to those of the crowd.
Benjamin Graham