Benjamin Graham Quotes - Page 6

The world has not learned the technique of balanced expansion without the resultant commercial and financial congestion.

Stocks can be dynamite.

The only thing you should do with pro forma earnings is ignore them.

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.

A price decline is of no real importance to the bona fide investor unless it is either very substantial say, more than a third from cost or unless it reflects a known deterioration of consequence in the company's position. In a well-defined bear market many sound common stocks sell temporarily at extraordinary low prices. It is possible that the investor may then have a paper loss of fully 50 per cent on some of his holdings, without any convincing indication that the underlying values have been permanently affected.

Price statistics show clearly that instability in raw-material prices is a prime cause of instability of other prices.

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.

Wall Street has a few prudent principles; the trouble is that they are always forgotten when they are most needed.

Nothing in finance is more fatuous and harmful, in our opinion, than the firmly established attitude of common stock investors regarding questions of corporate management. That attitude is summed up in the phrase: "If you don't like the management, sell your stock." ... The public owners seem to have abdicated all claim to control over the paid superintendents of their property.

The sillier the market's behavior, the greater the opportunity for the business like investor.

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.

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.

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.

The existence of such a war chest might go far to strengthen our prestige and frighten off any would be assailant.

The modern world is not geared properly to the storage of goods.

I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities.

When somebody asserts that a stock has an earning power of so much, I am sure that the person who hears him doesn't know what he means, and there is a good chance that the man who uses it doesn't know what it means.

Those with the enterprise lack the money and those with the money lack the enterprise to buy stocks when they are cheap.

To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks.

To see how much a company is truly earning on the capital it deploys in its businesses, look beyond EPS to Return on Invested Capital (ROIC).

The best values today are often found in the stocks that were once hot and have since gone cold.

Have the courage of your knowledge and experience. If you have formed a conclusion from the facts and if you know your judgment is sound, act on it – even though others may hesitate or differ.

Do not let anyone else run your business

Both individual skill (art) and chance are important factors in determining success or failure.

The history of the past fifty years, and longer, indicates that a diversified holding of representative common stocks will prove more profitable over a stretch of years than a bond portfolio, with one important provisio that the shares must be purchased at reasonable market levels, that is, levels that are reasonable in the light of fairly well-defined standards derived from past experience.