Benjamin Graham
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.Collection: Horse
Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.Collection: Intelligent
Speculative stock movements are carried too far in both directions, frequently in the general market and at all times in at least some of the individual issues.Collection: Issues
Obvious prospects for physical growth in a business do not translate into obvious profits for investors.Collection: Growth
In nine companies out of ten the factor of fluctuation has been a more dominant and important consideration in the matter of investment than has the factor of long-term growth or declineCollection: Long
Always remember that market quotations are there for convenience, either to be taken advantage of or to be ignored.Collection: Taken
The memory of the financial community is proverbially and distressingly short.Collection: Memories
THERE is widespread agreement among economists that abuse of credit constitutes one of the chief unwholesome elements in business booms and is mainly responsible for the ensuing crash and depression.Collection: Agreement
For 99 issues out of 100 we could say that at some price they are cheap enough to buy and at some price they would be so dear that they would be sold.Collection: Issues
The distinction between investment and speculation in common stocks has always been a useful one and its disappearance is cause for concern.Collection: Investing
you may take it as an axiom that you cannot profit in Wall Street by continuously doing the obvious or the popular thingCollection: Wall
we have complaints that institutional dominance of the stock market has put 'the small investor at a disadvantage because he can't compete with the trust companies' huge resources, etc. The facts are quite the opposite. It may be that the institutions are better equipped than the individual to speculate in the market.But I am convinced that an individual investor with sound principles, and soundly advised, can do distinctly better over the long pull than large institutions.Collection: Opposites
The underlying principles of sound investment should not alter from decade to decade, but the application of these principles must be adapted to significant changes in the financial mechanisms and climate.Collection: Intelligent
As in roulette, same is true of the stock trader, who will find that the expense of trading weights the dice heavily against him.Collection: Intelligent
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.Collection: Doe
The determining trait of the enterprising (or active, or aggressive) investor is his willingness to devote time and care to the selection of securities that are both sound and more attractive than the average.Collection: Average
Price statistics show clearly that instability in raw-material prices is a prime cause of instability of other prices.Collection: Raw Materials
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.Collection: 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.Collection: Fall
Nearly everyone interested in common stocks wants to be told by someone else what he thinks the market is going to do. The demand being there, it must be supplied.Collection: Thinking
Confusing speculation with investment is always a mistake.Collection: Mistake
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.Collection: Investing
We have been trying to point out that this concept of an indefinitely favorable future is dangerous, even if it is true; because even if it is true you can easily overvalue the security, since you make it worth anything you want it to be worth. Beyond this, it is particularly dangerous too, because sometimes your ideas of the future turn out to be wrong. Then you have paid an awful lot for a future that isn't there. Your position then is pretty bad.Collection: Ideas
The investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage.Collection: Investing
Individual security bargains may be located by the process of security analysis practically at any time. They can be bought with good overall results at all periods except when the general market itself is clearly in a selling range for investors. They show up to best advantage during the years in which the market remains in a relatively narrow and neutral area.Collection: Years
Evidently stockholders have forgotten more than to look at balance sheets. They have forgotten also that they are owners of a business and not merely owners of a quotation on the stock ticker. It is time, and high time, that the millions of American shareholders turned their eyes from the daily market reports long enough to give some attention to the enterprises themselves of which they are the proprietors, and which exist for their benefit and at their pleasure.Collection: Eye
We are convinced that the intelligent investor can derive satisfactory results from pricing of either type (market timing or fundamental analysis via price). We are equally sure that if he places his emphasis on timing, in the sense of forecasting, he will end up as a speculator and with a speculator's financial results." And "The speculator's primary interest lies in anticipating and profiting from market fluctuations. The investor's primary interest lies in acquiring and holding suitable securities at suitable prices.Collection: Lying
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 lossCollection: Ignorance
The market is always making mountains out of molehills and exaggerating ordinary vicissitudes into major setbacks.Collection: Mountain
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.Collection: Keys
The people of the United States will not tolerate another deep depression that arises not from any lack of natural resources, productive capacity or man and brain power, but solely from imperfections in the functioning of the system of finance capitalism.Collection: Men
Even with a margin of safety in the investor's favor, an individual security may work out badly. For the margin guarantees only that he has a better chance for profit than for loss - not that loss is impossible. But as the number of such commitments is increased the more certain does it become that the aggregate of the profits will exceed the aggregate of the losses.Collection: Commitment
The world has not learned the technique of balanced expansion without the resultant commercial and financial congestion.Collection: Technique
The stock market resembles a huge laundry in which institutions take in large blocks of each others washing ... without rhyme or reason.Collection: Block
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.Collection: Honesty
The beauty of periodic rebalancing is that it forces you to base your investing decisions on a simple, objective standard.Collection: Simple
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.Collection: Men
The existence of such a war chest might go far to strengthen our prestige and frighten off any would be assailant.Collection: War
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.Collection: Taken
Stocks can be dynamite.Collection: Dynamite
The only thing you should do with pro forma earnings is ignore them.Collection: Investing
The modern world is not geared properly to the storage of goods.Collection: World
I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities.Collection: Opportunity
The investor has a right to expect good results to flow from a consistent and courageous application of the principle of buying after the market has declined substantially and selling after it has had a spectacular rise. But he cannot expect to reduce this principle to a simple and foolproof formula, with profits guaranteed and no anxious periods.Collection: Simple
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.Collection: Character
The art of investment has one characteristic that is not generally appreciated. A creditable, if unspectacular, result can be achieved by the lay investor with a minimum of effort and capability; but to improve this easily attainable standard requires much application and more than a trace of wisdom. If you merely try to bring just a little extra knowledge and cleverness to bear upon your investment program, instead of realizing a little better than normal results, you may well find that you have done worse.Collection: Art
Diversification is an established tenet of conservative investment.Collection: Investing
The correct attitude of the security analyst toward the stock market might well be that of a man toward his wife. He shouldn't pay too much attention to what the lady says, but he can't afford to ignore it entirely. That is pretty much the position that most of us find ourselves vis-à-vis the stock market.Collection: Attitude
You must never delude yourself into thinking that you're investing when you're speculating.Collection: Thinking