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Benjamin Graham

Benjamin Graham Biography

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“The chief obstacle to success lies in the stubborn fact that if the favorable prospects of a concern are clearly apparent they are almost always reflected already in the current price of the stock. Buying such an issue is like betting on a topheavy favorite in a horse race. The chances may be on your side, but the real odds are against you.”

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Author:Benjamin Graham
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“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.”

ShouldMeanLongHas BeensMadeRealPastValuesTurnsEnergyTermInterestResultsHonestSecurityMajorsIncreaseManagementInvestmentSellingCorporationsLong TermBuyingInvestorsReceivingCompetentDividendsBuying And Selling
Author:Benjamin Graham
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“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.”

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Author:Benjamin Graham
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“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.”

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Author:Benjamin Graham
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“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.”

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Book:The Intelligent Investor: A Book of Practical Counsel
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“If we assume that there are normal or standard income results to be obtained from investing money in securities, then the role of the adviser can be more readily established. He will use his superior training and experience to protect his clients against mistakes and to make sure that they obtain the results to which their money is entitled.”

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Book:The Intelligent Investor: A Book of Practical Counsel
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“Though business conditions may change, corporations and securities may change, and financial institutions and regulations may change, human nature remains the same. Thus the important and difficult part of sound investment, which hinges upon the investor's own temperament and attitude, is not much affected by the passing years.”

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Book:The Intelligent Investor: A Book of Practical Counsel
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“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.”

YearsWellsImportantLightPastLevelsCommonShareProveStandardsDefinedReasonableFiftyRepresentativesProfitablePortfoliosPast Experiences
Book:The Intelligent Investor: A Book of Practical Counsel
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“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.”

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“The investor is neither smart not richer when he buys in an advancing market and the market continues to rise. That is true even when he cashes in a goodly profit, unless either (a) he is definitely through with buying stocks an unlikely story or (b) he is determined to reinvest only at considerably lower levels. In a continuous program no market profit is fully realized until the later reinvestment has actually taken place, and the true measure of the trading profit is the difference between the previous selling level and the new buying level.”

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Author:Benjamin Graham
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“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.”

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Book:The Intelligent Investor: A Book of Practical Counsel
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“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.”

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Author:Benjamin Graham
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“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.”

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Author:Benjamin Graham
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