Benjamin Graham Quotes
101 Benjamin Graham Quotes
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Never buy a stock immediately after a substantial rise or sell one immediately after a substantial drop.
Benjamin Graham
We cannot help thinking too, that the average individual who opens a brokerage account with the idea of making conservative common-stock investments is likely to find himself beset by untoward influences in the direction of speculation and speculatives losses.
Benjamin Graham
If the reason people invest is to make money, then in seeking advice they are asking others to tell them how to make money. That idea has some element of naiveté. Businessmen seek professional advice on various elements of their business, but they do not expect to be told how to make a profit.
Benjamin Graham
Nevertheless, since his [A stockbroker’s] business is to earn commissions, he can hardly avoid being speculation-minded.
Benjamin Graham
The more dependent the valuation becomes on anticipations of the future – and the less it is tied to a figure demonstrated by past performance – the more vulnerable it becomes to possible miscalculation and serious error.
Benjamin Graham
It is undoubtedly better to concentrate on one stock that you know is going to prove highly profitable, rather than dilute your results to a mediocre figure, merely for diversifications sake.
Benjamin Graham
There is really no way of valuing a high-growth company, in which the analyst can make realistic assumptions of both the proper multiplier for the current earnings and the expectable multiplier for the future earnings.
Benjamin Graham
For most investors it would be probably best to assure themselves that they are getting good value for the prices they pay, and let it go at that.
Benjamin Graham
Nine statistical requirements: 1) Adequate size 2) A sufficiently strong financial condition 3) Continued dividends for at least the past 20 years 4) No earnings deficit in the past ten years (No loss) 5) Ten year growth of at least one third in per-share earnings 6) Price of stock no more than 1.5 times net asset value 7) Price no more than 15 times average earnings of the past three years.
Benjamin Graham
But they suggest that 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 reasonably priced.
Benjamin Graham
Those who emphasise protection are always especially concerned with the price of the issue at the time of the study. Their main effort is to assure themselves of a substantial margin of indicated present value above the market price – which margin could absorb unfavourable developments in the future. Generally speaking, therefore, it is not so necessary for them to be enthusiastic over the company’s long-run prospects as it is to be reasonably confident that the enterprise will get along.
Benjamin Graham
Extremely few companies have been able to show a high rate of uninterrupted growth for long periods of time.
Benjamin Graham
It always seemed, and still seems, ridiculously simple to say that if one can acquire a diversified group of common stocks at a price less than the applicable net current assets alone – after deducting all prior claims, and counting as zero the fixed and other assets – the results should be quite satisfactory. They were so in our experience, for more than 30 years.
Benjamin Graham
Can you really make money in them [stocks] without taking a serious risk? Yes indeed if you can find enough of them to make a diversified group, and if you don’t lose patience if they fail to advance soon after you buy them. Sometimes the patience needed may appear quite considerable. [But] most of the bargain issues in our experience have not taken that long to show good profits.
Benjamin Graham
We consider the recent development of stock-option warrants as a near fraud, an existing menace, and a potential disaster. They should be prohibited by law.
Benjamin Graham
Other issues appeared to be worth more than their price, being affected by the opposite sort of market attitude – which we might call ‘underspeculation’ – or by undue pessimism because of a shrinkage in earnings.
Benjamin Graham
The function of the margin of safety is, in essence, that of rendering unnecessary an accurate estimate of the future.
Benjamin Graham
This past ability to earn in excess of interest requirements constitutes the margin of safety that is counted on to protect the investor against loss or discomfiture in the event of some future decline in net income.
Benjamin Graham
The risk of paying too high a price for good quality stocks – while a real one – is not the chief hazard confronting the average buyer of securities. Observation over many years has taught us that the chief losses to investors come from the purchase of low quality securities at times of favourable business conditions.
Benjamin Graham
The margin of safety is always dependent on the price paid.
Benjamin Graham
One must have the means, the judgment, and the courage to take advantage of them [opportunities that knock on his door].
Benjamin Graham
There are two requirements for success in Wall Street. One you have to think correctly; and secondly you have to think independently.
Benjamin Graham
If a company was so sound that it’s stock carried little risk of loss, the company also must present excellent chances for future gains. It is easier for a company to build a profitable empire on a solid foundation than on a shaky one.
Benjamin Graham
[On getting Irving Kahn to look up the answer in the dictionary rather than simply telling him] If I had told you the answer, you might have soon forgotten it. Now you will remember.
Benjamin Graham
The disciplined, rational investor neither follows popular choice nor plays market swings; rather he searches for stocks selling a price below their intrinsic value and waits for the market to recognise and correct it’s errors. It invariably does and share price climbs. When the price has risen to the actual value of the company, it is time to take profits, which then are reinvested in a new undervalued security.
Benjamin Graham
If the share price advances, it is because most investors expect earnings to grow.
Benjamin Graham
The investor who buys securities only when the marketprice looks cheap on the basis of the company’s statements and sells them when they look high on the same bias, probably will not make spectacular profits. But on the other hand, he will probably avoid equally spectacular and more frequent losses. He should have a better-than-average chance of obtaining satisfactory results. And this is the chief objective of intelligent investing.
Benjamin Graham
To purchase securities at prices less than their intrinsic value as determined by careful analysis with particular emphasis on the purchase of securities at less than their liquidating value.
Benjamin Graham
An investment is based on incisive, quantitative analysis, while speculation depends on whim and guesswork.
Benjamin Graham
I have known [Warren] Buffett for many years, and I must say I have never met anyone else with his combination of high character and brilliant business qualities. His record as an investment fund manager is probably unequalled.
Benjamin Graham
Yes, Warren [Buffett] has done very well.
Benjamin Graham
They made me a professor because I am a practical operator.
Benjamin Graham
Pascal said the ‘heart has its reasons that the reason doesn’t understand.’ For ‘heart’ read ‘Wall Street’.
Benjamin Graham
I blamed myself not so much for my failure to protect myself against the disaster I had been predicting, as for having slipped into an extravagant way of life which I hadn’t the temperament or capacity to enjoy. I quickly convinced myself that the true key to material happiness lay in a modest standard of living which could be achieved with little difficulty under almost all economic conditions.
Benjamin Graham
It is our view that that stock-market timing cannot be done, with general success, unless the time to buy is related to an attractive price level, as measured by analytical standards.
Benjamin Graham
Traditionally the investor has been the man with patience and the courage of his convictions who would buy when the harried or disheartened speculator was selling. If the investor is now to hold back until the market encourages him, how will he distinguish himself from the speculator, and wherein will he deserve any better than the ordinary speculators fate?
Benjamin Graham
Exactly the same mathematical advantage which practically assures good results in the investment field may prove entirely ineffective where luck is the overshadowing influence.
Benjamin Graham
Abnormally good or abnormally bad conditions do not last forever.
Benjamin Graham
Much as the investor would like to be able to buy at just the right time and to sell out when prices are about to fall, experience shows that he is not likely to be brilliantly successful in such efforts and that by injecting the trading element into his investment operations he will disrupt the income return on his capital and inevitably shift his interest into speculative directions.
Benjamin Graham
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 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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