Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed.— Benjamin Graham
The most sensational Benjamin Graham quotes that will inspire your inner self
Successful investing is about managing risk, not avoiding it.
The intelligent investor is a realist who sells to optimists and buys from pessimists.
In the world of securities, courage becomes the supreme virtue after adequate knowledge and a tested judgment are at hand.
In the short run, the market is a voting machine, but in the long run it is a weighing machine.
If you are shopping for common stocks, choose them the way you would buy groceries, not the way you would buy perfume.
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.
The true investor... will do better if he forgets about the stock market and pays attention to his dividend returns and to the operation results of his companies.
An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return.
The chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions.
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.
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.
Buy not on optimism, but on arithmetic.
The investor with a portfolio of sound stocks should expect their prices to fluctuate and should neither be concerned by sizable declines nor become excited by sizable advances. He should always remember that market quotations are there for his convenience, either to be taken advantage of or to be ignored.
It requires strength of character in order to think and to act in opposite fashion from the crowd and also patience to wait for opportunities that may be spaced years apart.
Successful investing professionals are disciplined and consistent and they think a great deal about what they do and how they do it.
Diversification is an established tenet of conservative investment.
The intelligent investor should recognize that market panics can create great prices for good companies and good prices for great companies.
To be an investor you must be a believer in a better tomorrow.
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.
Speculators often prosper through ignorance;
it is a cliché that in a roaring bull market knowledge is superfluous and experience is a handicap. But the typical experience of the speculator is one of temporary profit and ultimate loss
Price fluctuations have only one significant meaning for the true investor.
They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal.
In the short-run, the market is a voting machine - reflecting a voter-registration test that requires only money, not intelligence or emotional stability - but in the long- run, the market is a weighing machine.
To have a true investment, there must be a true margin of safety.
And a true margin of safety is one that can be demonstrated by figures, by persuasive reasoning, and by reference to a body of actual experience.
There is a close logical connection between the concept of a safety margin and the principle of diversification.
The essence of investment management is the management of risks, not the management of returns.
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.
The intelligent investor is likely to need considerable will power to keep from following the crowd.
By developing your discipline and courage, you can refuse to let other people's mood swings govern your financial destiny. In the end, how your investments behave is much less important than how you behave.
Always buy your straw hats in the Winter
At heart, "uncertainty" and "investing" are synonyms.
The investor's chief problem - and even his worst enemy - is likely to be himself.
Always remember that market quotations are there for convenience, either to be taken advantage of or to be ignored.
The defensive (or passive) investor will place chief emphasis on the avoidance of serious mistakes or losses. His second aim will be freedom from effort, annoyance, and the need for making frequent decisions.
High valuations entail high risks.
The distinction between investment and speculation in common stocks has always been a useful one and its disappearance is cause for concern.
Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of good business conditions. The purchasers view the good current earnings as equivalent to 'earning power' and assume that prosperity is equivalent to safety.
Knowledge is only one ingredient on arriving at a stock's proper price.
The other ingredient, fully as important as information, is sound judgment.
Stocks can be dynamite.
Most businesses change in character and quality over the years, sometimes for the better, perhaps more often for the worse. The investor need not watch his companies' performance like a hawk; but he should give it a good, hard look from time to time.
A speculator gambles that a stock will go up in price because somebody else will pay even more for it.
The margin of safety is always dependent on the price paid.
It will be large at one price, small at some higher price, nonexistent at some still higher price.
As in roulette, same is true of the stock trader, who will find that the expense of trading weights the dice heavily against him.
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.
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.
Both individual skill (art) and chance are important factors in determining success or failure.
Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.
Although there are good and bad companies, there is no such thing as a good stock; there are only good stock prices, which come and go.
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.
The purchase of a bargain issue presupposes that the market's current appraisal is wrong, or at least that the buyer's idea of value is more likely to be right than the market's. In this process the investor sets his judgement against that of the market. To some this may seem arrogant or foolhardy.