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Rupert Hargreaves
Rupert Hargreaves
Articles (307)  | Author's Website |

Some of Graham’s Best Advice

A collection of quotes from the 'father of value investing'

June 23, 2017

Benjamin Graham’s book, the "Intelligent Investor," is the value investor's bible. The book is so highly regarded because it teaches the difference between stock investing and business ownership, as well as how to value equities. The "Intelligent Investor" is the sort of book you can go back to time and again, and indeed you should because it is full of investment nuggets you should not forget and should continually seek to remind yourself of.

Below is a collection of my favorite quotes, which I believe describe Graham’s philosophy perfectly and outline the principles every value investor should adhere to.

"People who invest make money for themselves; people who speculate make money for their brokers. And that, in turn, is why Wall Street perennially downplays the durable virtues of investing and hypes the gaudy appeal of speculation."

"Confusing speculation with investment is always a mistake."

"We urge the beginner in security buying not to waste his efforts and his money in trying to beat the market. Let him study security values and initially test out his judgment on price versus value with the smallest possible sums."

"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."

"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."

"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."

"Always remember that market quotations are there for convenience, either to be taken advantage of or to be ignored."

"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."

"Mr. Market’s job is to provide you with prices; your job is to decide whether it is to your advantage to act on them. You no not have to trade with him just because he constantly begs you to."

"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."

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

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

"High valuations entail high risks."

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

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

"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)."

"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."

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

"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."

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

"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."

"Successful investing is about managing risk, not avoiding it."

"Without a saving faith in the future, no one would ever invest at all. To be an investor, you must be a believer in a better tomorrow."

About the author:

Rupert Hargreaves
Rupert is a committed value investor and regularly writes and invests following the principles set out by Benjamin Graham. Prior to his investing and writing career, Rupert was as a proprietary currency trader. Rupert holds qualifications from the Chartered Institute for Securities & Investment and the CFA Society of the UK. He covers everything value investing for ValueWalk and other sites on a freelance basis.

Visit Rupert Hargreaves's Website


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