Investing Quotes - Page 22

• 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.

  Benjamin Graham

  Errors, Odds, Safety

  Benjamin Graham (2009). “The Intelligent Investor, Rev. Ed”, p.13, Harper Collins

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

  Benjamin Graham

  Book, Adoption, Purpose

  Benjamin Graham (2009). “The Intelligent Investor, Rev. Ed”, p.1, Harper Collins

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• 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.

  Benjamin Graham

  Making Money, Approach, Single Person

  Benjamin Graham (2009). “The Intelligent Investor, Rev. Ed”, p.3, Harper Collins

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• The defensive (or passive) investor will place chief emphasis on the avoidance of serious mistakes or losses. His second aim will be freedom from effort, annoyance, and the need for making frequent decisions.

  Benjamin Graham

  Mistake, Loss, Effort

  Benjamin Graham (2009). “The Intelligent Investor, Rev. Ed”, p.6, Harper Collins

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• 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.

  Benjamin Graham

  Average, Sound, Care

  Benjamin Graham (2009). “The Intelligent Investor, Rev. Ed”, p.6, Harper Collins

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• 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.

  Benjamin Graham

  Issues, Would Be, Enough

  Benjamin Graham (2009). “The Intelligent Investor, Rev. Ed”, p.8, Harper Collins

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

  Benjamin Graham

  Causes, Common, Investment

  Benjamin Graham (2009). “The Intelligent Investor, Rev. Ed”, p.20, Harper Collins

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• 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.

  Benjamin Graham

  Wall, Average, Sound

  Benjamin Graham (2009). “The Intelligent Investor, Rev. Ed”, p.31, Harper Collins

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

  Benjamin Graham

  Ratios, Earning, Nonsensical

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

  Benjamin Graham

  Past, Average, Years

  Benjamin Graham (1965). “The Intelligent Investor: A Book of Practical Counsel”, p.120, Prabhat Prakashan

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

  Benjamin Graham

  Issues, Quality, Portfolios

  Benjamin Graham (1965). “The Intelligent Investor: A Book of Practical Counsel”, p.130, Prabhat Prakashan

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• 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).

  Benjamin Graham

  Return, Looks, Earning

  Benjamin Graham (1965). “The Intelligent Investor: A Book of Practical Counsel”, p.137, Prabhat Prakashan

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• 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.

  Benjamin Graham

  Safety, Miscalculations, Higher

  Benjamin Graham (1959). “The Intelligent Investor: A Book of Practical Counsel”

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• There is a close logical connection between the concept of a safety margin and the principle of diversification.

  Benjamin Graham

  Safety, Principles, Connections

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• Diversification is an established tenet of conservative investment.

  Benjamin Graham

  Conservative, Investment, Diversification

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• 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.

  Benjamin Graham

  Opportunity, Practice, Safety

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• Losing some money is an inevitable part of investing, and there's nothing you can do to prevent it. But to be an intelligent investor, you must take responsibility for ensuring that you never lose most or all of your money.

  Benjamin Graham

  Responsibility, Intelligent, Losing

  Benjamin Graham (1965). “The Intelligent Investor: A Book of Practical Counsel”, p.207, Prabhat Prakashan

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

  Benjamin Graham

  Too Much, Pay, Chance

  Benjamin Graham (1965). “The Intelligent Investor: A Book of Practical Counsel”, p.207, Prabhat Prakashan

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• The safe time to invest is when there is blood in the streets.

  Mark Mobius

  Blood, Safe, Streets

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• 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.

  Benjamin Graham

  Commitment, Loss, Numbers

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• The cost of performing well in bad times can be relative underperformance in good times.

  Seth Klarman

  Cost, Good Times, Bad Times

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• ... not doing what we love in the name of greed is very poor management of our lives.

  Warren Buffett

  Life, Investment Success, Names

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• And, partly, I had found that theory-structure was a superpower in helping one get what one wanted. As I had early discovered in school wherein I had excelled without labor, guided by theory, while many others, without mastery of theory failed despite monstrous effort. Better theory I thought had always worked for me and, if now available could make me acquire capital and independence faster and better assist everything I loved.

  Charlie Munger

  School, Effort, Independence

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• Charlie and I have a number of filters that things have to get through before we'll think about them.

  Warren Buffett

  Thinking, Numbers, Filters

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• I think I've been in the top 5% of my age cohort all my life in understanding the power of incentives, and all my life I've underestimated it.

  Charlie Munger

  Thinking, Understanding, Age

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