Benjamin Graham Intelligent Quotations

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

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

Buy not on optimism, but on arithmetic.

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

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

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.

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.

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

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

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

Intelligent investment is more a matter of mental approach than it is of technique. A sound mental approach toward stock fluctuations is the touchstone of all successful investment under present-day conditions.

The reader can test his own psychology by asking himself whether he would consider, in retrospect, the selling at 156 in 1925 and buying back at 109 in 1931 was a satisfactory operation. Some may think that an intelligent investor should have been able to sell out much closer to the high of 381 and to buy back nearer the low of 41. If that is your own view you are probably a speculator at heart and will have trouble keeping to true investment precepts while the market rushes up and down.

Investing is most intelligent when it is most businesslike.

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

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.

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.

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

In an ideal world, the intelligent investor would hold stocks only when they are cheap and sell them when they become overpriced, then duck into the bunker of bonds and cash until stocks again become cheap enough to buy.