Benjamin Graham quotes:

Wall Street people learn nothing and forget everything.

Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.

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.

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.

While enthusiasm may be necessary for great accomplishments elsewhere, on Wall Street it almost invariably leads to disaster

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 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.

In the financial markets, hindsight is forever 20/20, but foresight is legally blind. And thus, for most investors, market timing is a practical and emotional impossibility.

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 utility, or intrinsic value of gold as a commodity is now considerably less than in the past; its monetary status has become extraordinarily ambiguous; and its future is highly uncertain.

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.

In the short run, the market is a voting machine, but in the long run it is a weighing machine.

Both a priori reasoning and experience teach us that as as these funds grow larger the geometrical rate of growth by compound interest ultimately defeats itself.

The intelligent investor is likely to need considerable will power to keep from following the crowd.

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.

Buy not on optimism, but on arithmetic.

The investor should be aware that even though safety of its principal and interest may be unquestioned, a long term bond could vary widely in market price in response to changes in interest rates.

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.

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.

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.

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.

To be an investor you must be a believer in a better tomorrow.

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.

The market is always making mountains out of molehills and exaggerating ordinary vicissitudes into major setbacks.

The essence of investment management is the management of risks, not the management of returns.

The individual investor should act consistently as an investor and not as a speculator. This means ... that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money's worth for his purchase.

Successful investment may become substantially a matter of techniques and criteria that are learnable, rather than the product of unique and incommunicable mental powers.

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.

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 reasonable priced.

Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.

As in roulette, same is true of the stock trader, who will find that the expense of trading weights the dice heavily against him.

A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.

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

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.

The idea of storage as a solution of economic problems at least has the support of common sense.It is diametrically opposed to the topsy-turvy Alice-in-Wonderland reasoning that has marked so much of our depression thinking and policy.

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

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.

Successful investing professionals are disciplined and consistent and they think a great deal about what they do and how they do it.

High valuations entail high risks.

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 intelligent investor is a realist who sells to optimists and buys from pessimists.

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.

An intelligent investor gets satisfaction from the thought that his operations are exactly opposite to those of the crowd.

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

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 genuine investor in common stocks does not need a great equipment of brain and knowledge, but he does need some unusual qualities of character

We define a bargain issue as one which, on the basis of facts established by analysis, appears to be worth considerably more that it is selling for.

Investing isn't about beating others at their game. It's about controlling yourself at your own game.

All the real money in investment will have to be made as most of it has been in the past not out of buying and selling but out of owning and holding securities, receiving interests and dividends therein, and benefiting from their long-term increases in value. Hence stockholder's major energies and wisdom as investors should be directed toward assuring themselves of the best operating results from their corporations. This in turn means assuring themselves of fully honest and competent managements.

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.

In the world of securities, courage becomes the supreme virtue after adequate knowledge and a tested judgment are at hand.

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

Successful investing is about managing risk, not avoiding it.

By refusing to pay too much for an investment, you minimize the chances that your wealth will ever disappear or suddenly be destroyed.

You must never delude yourself into thinking that you're investing when you're speculating.

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.

Buy when most people, including experts, are pessimistic, and sell when they are actively optimistic,

Stock speculation is largely a matter of A trying to decide what B, C and D are likely to think-with B, C and D trying to do the same.

The intelligent investor gets interested in big growth stocks not when they are at their most popular - but when something goes wrong.

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.

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.

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.

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.

If you are shopping for common stocks, choose them the way you would buy groceries, not the way you would buy perfume.

A great company is not a great investment if you pay too much for the stock.

you may take it as an axiom that you cannot profit in Wall Street by continuously doing the obvious or the popular thing

Knowledge is only one ingredient on arriving at a stock's proper price. The other ingredient, fully as important as information, is sound judgment.

An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return.

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.

The chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions.

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.

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.

The value of any investment is, and always must be, a function of the price you pay for it.

Individuals who cannot master their emotions are ill-suited to profit from the investment process.

Experience teaches that the time to buy stocks is when their price is unduly depressed by temporary adversity. In other words, they should be bought on a bargain basis or not at all.

The purpose of this book is to supply, in the form suitable for laymen, guidance in the adoption and execution of an investment policy.

Stocks can be dynamite.

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

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.

At heart, "uncertainty" and "investing" are synonyms.

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

Never buy a stock immediately after a substantial rise or sell one immediately after a substantial drop.

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.

The intelligent investor should recognize that market panics can create great prices for good companies and good prices for great companies.

The function of the margin of safety is, in essence, that of rendering unnecessary an accurate estimate of the future.

Thousands of people have tried, and the evidence is clear: The more you trade, the less you keep.

Always buy your straw hats in the Winter

Never buy a stock because it has gone up or sell one because it has gone down.

An investor calculates what a stock is worth, based on the value of its businesses.

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.

It is our argument that a sufficiently low price can turn a security of mediocre quality into a sound investment opportunity - provided that the buyer is informed and experienced and he practices adequate diversification. For, if the price is low enough to create a substantial margin of safety, the security thereby meets our criterion of investment.

The intelligent investor shouldn't ignore Mr. Market entirely. Instead, you should do business with him- but only to the extent that it serves your interests.

Only in the exceptional case, where the integrity and competence of the advisers have been thoroughly demonstrated, should the investor act upon the advice of others without understanding and approving the decision made.

Obvious prospects for physical growth in a business do not translate into obvious profits for investors.

It is absurd to think that the general public can ever make money out of market forecasts.

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

In most cases the favorable price performance will be accompanied by a well-defined improvement in the average earnings, in the dividend, and in the balance-sheet position. Thus in the long run the market test and the ordinary business test of a successful equity commitment tend to be largely identical.

Diversification is an established tenet of conservative investment.

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 investor's primary interest lies in acquiring and holding suitable securities at suitable prices.

Mathematics is ordinarily considered as producing precise and dependable results; but in the stock market the more elaborate and abstruse the mathematics the more uncertain and speculative are the conclusions we draw there from. Whenever calculus is brought in, or higher algebra, you could take it as a warning that the operator was trying to substitute theory for experience, and usually also to give to speculation the deceptive guise of investment.

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

The most realistic distinction between the investor and the speculator is found in their attitude toward stock-market movements. 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. Market movements are important to him in a practical sense, because they alternately create low price levels at which he would be wise to buy and high price levels at which he certainly should refrain from buying and probably would be wise to sell.

We have not known a single person who has consistently or lastingly make money by thus "following the market". We do not hesitate to declare this approach is as fallacious as it is popular.

Real investment risk is measured not by the percent that a stock may decline in price in relation to the general market in a given period, but by the danger of a loss of quality and earnings power through economic changes or deterioration in management.

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.

A defensive investor can always prosper by looking patiently and calmly through the wreckage of a bear market.

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

The ideal form of common stock analysis leads to a valuation of the issue which can be compared with the current price to determine whether or not the security is an attractive purchase.

If fees consume more than 1% of your assets annually, you should probably shop for another adviser.

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.

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.

A speculator gambles that a stock will go up in price because somebody else will pay even more for it.

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.

To enjoy a reasonable chance for continued better than average results, the investor must follow policies which are (1) inherently sound and promising, and (2) not popular on Wall Street.

The distinction between investment and speculation in common stocks has always been a useful one and its disappearance is cause for concern.

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.

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.