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

More quotes by Benjamin Graham

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You must never delude yourself into thinking that you're investing when you're speculating.
Benjamin Graham
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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
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It is a fact worth pondering that four centuries ago the evil of an abundance or surplus arose from its being kept off the market, while today the evil of surplus lies in its being thrown upon the market.
Benjamin Graham
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Price statistics show clearly that instability in raw-material prices is a prime cause of instability of other prices.
Benjamin Graham
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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.
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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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 only thing you should do with pro forma earnings is ignore them.
Benjamin Graham
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Never mingle your speculative and investment operations in the same account nor in any part of your thinking.
Benjamin Graham
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The stock market resembles a huge laundry in which institutions take in large blocks of each others washing ... without rhyme or reason.
Benjamin Graham
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Never buy a stock immediately after a substantial rise or sell one immediately after a substantial drop.
Benjamin Graham
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Successful investing is about managing risk, not avoiding it.
Benjamin Graham
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Abnormally good or abnormally bad conditions do not last forever.
Benjamin Graham
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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
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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.
Benjamin Graham
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Though business conditions may change, corporations and securities may change, and financial institutions and regulations may change, human nature remains the same. Thus the important and difficult part of sound investment, which hinges upon the investor's own temperament and attitude, is not much affected by the passing years.
Benjamin Graham
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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.
Benjamin Graham
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Before you place your financial future in the hands of an adviser, it's imperative that you find someone who not only makes you comfortable but whose honesty is beyond reproach.
Benjamin Graham
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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.
Benjamin Graham
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High valuations entail high risks.
Benjamin Graham