Benjamin Graham Quotes - Page 8

If General Motors is worth $60 a share to an investor it must be because the full common-stock ownership of this gigantic enterprise as a whole is worth 43 million (shares) times $60, or no less than $2,600 million.

It's nonsensical to derive a price/earnings ratio by dividing the known current price by unknown future earnings.

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.

To establish the right price for a stock, the market must have adequate information, but it by no means follows that is the market has this information it will thereupon establish the right price.

Good managements produce a good average market price, and bad managements produce bad market prices.

The investor has the benefit of the stock market's daily and changing appraisal of his holdings, 'for whatever that appraisal may be worth', and, second, that the investor is able to increase or decrease his investment at the market's daily figure - 'if he chooses'. Thus the existence of a quoted market gives the investor certain options which he does not have if his security is unquoted. But it does not impose the current quotation on an investor who prefers to take his idea of value from some other source.

The most striking thing about Graham's discussion of how to allocate your assets between stocks and bonds is that he never mentions the word "age".

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.

It is worth pointing out that assuredly not more than one person out of a hundred who stayed in the market after after 1925 emerged from it with a net profit and that the speculative losses taken were appalling.

there is a tendency in part of Wall Street people to pay excessive attention to the most recent figures and the present financial picture.

Instead of passing blithely over into that Promised Land, flowing almost literally with milk and honey, it may be our destiny to wander a full 40 years or more in the wilderness of doubt and divided sentiments.

Calculate a stock's price/earnings ratio yourself, using Graham's formula of current price divided by average earnings over the past three years.

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.

Whether we like it or not, government intervention in the face of surplus is here to stay.

There is something paradoxical in the fact that by establishing an export market we subject our entire domestic production to the vagaries of that market.

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.

Every corporate security may be best viewed, in the first instance, as an ownership interest in, or a claim against, a specific business enterprise.

... the loss of public confidence in the financial community growing out of its own conduct in recent years. I insist that more damage has been done to stock values and to the future of equities from inside Wall Street than from outside Wall Street.

The money cost of the reservoir plan literally fades into insignificance when it is compared with the financial burden which the great depression imposed on the nation.

It must be fundamentally wrong to reduce production of food and fiber while one-third of our population is still ill fed and ill clothed.

The Reservoir system will function not only as an equalizer of business conditions, but also as a national store to meet further emergencies, such as war and drought, and-most important of all-as the concrete means of developing a steadily higher living standard for all.

The Reservoir plan is an engineering mechanism applied to the field of economics, and in its essence it has nothing to do with democracy or any other political philosophy.