Quote

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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Benjamin Graham
Age: 82 †
Born: 1894
Born: May 8
Died: 1976
Died: September 21
Economist
Financier
Investor
University Teacher
Writer
London
England
Huge
Washing
Others
Rhyme
Reason
Stock
Without
Investing
Take
Block
Market
Resembles
Institutions
Blocks
Large
Laundry

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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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An investor calculates what a stock is worth, based on the value of its businesses.
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It is absurd to think that the general public can ever make money out of market forecasts.
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Successful investing is about managing risk, not avoiding it.
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Both individual skill (art) and chance are important factors in determining success or failure.
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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.
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The sillier the market's behavior, the greater the opportunity for the business like investor.
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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.
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Abnormally good or abnormally bad conditions do not last forever.
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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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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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The essence of investment management is the management of risks, not the management of returns.
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There is a close logical connection between the concept of a safety margin and the principle of diversification.
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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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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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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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Successful investment may become substantially a matter of techniques and criteria that are learnable, rather than the product of unique and incommunicable mental powers.
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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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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.
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