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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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Benjamin Graham
Age: 82 †
Born: 1894
Born: May 8
Died: 1976
Died: September 21
Economist
Financier
Investor
University Teacher
Writer
London
England
Returns
Risks
Investing
Investment
Management
Essence
Return
Risk

More quotes by Benjamin Graham

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Even defensive portfolios should be changed from time to time, especially if the securities purchased have an apparently excessive advance and can be replaced by issues much more reasonable priced.
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.
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The investor's chief problem - and even his worst enemy - is likely to be himself.
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The best values today are often found in the stocks that were once hot and have since gone cold.
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The distinction between investment and speculation in common stocks has always been a useful one and its disappearance is cause for concern.
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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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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.
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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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High valuations entail high risks.
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.
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The market is always making mountains out of molehills and exaggerating ordinary vicissitudes into major setbacks.
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.
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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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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 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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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.
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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.
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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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Why should the cotton growers suffer if there is shortage of wheat?
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The qualitative factors upon which most stress is laid are the nature of the business and the character of the management. These elements are exceedingly important, but they are also exceedingly difficult to deal with intelligently.
Benjamin Graham