This is the second part of what has become a two-part series on the best quotes from Benjamin Graham and "The Intelligent Investor."
These quotes pick out not only some of Graham's best advice but also some of the best advice in investing. What's always been fascinating about Graham and Wall Street is that while "The Intelligent Investor" has now been in circulation for several decades, Graham's timeless advice still goes relatively unheard. Wall Street still makes the same mistakes and investors continue to value stocks not as businesses but as tickers on the screen. Despite all of the writing that has been published on Graham and value investing over the years, little has gotten through. These quotes offer more timeless advice.
"No statement is more true and better applicable to Wall Street than the famous warning of Santayana: 'Those who do not remember the past are condemned to repeat it.'”
"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."
"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."
"The investor’s chief problem – and even his worst enemy – is likely to be himself."
"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."
"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."
"A speculator gambles that a stock will go up in price because somebody else will pay even more for it."
"There is no reason to feel any shame in hiring someone to pick stocks or mutual funds for you. But there’s one responsibility that you must never delegate. You, and no one but you, must investigate whether an adviser is trustworthy and charges reasonable fees."
"A great company is not a great investment if you pay too much for the stock."
"The intelligent investor gets interested in big growth stocks not when they are at their most popular – but when something goes wrong."
"Wall Street has a few prudent principles; the trouble is that they are always forgotten when they are most needed."
"Nothing important on Wall Street can be counted on to occur exactly in the same way as it happened before."
"It’s nonsensical to derive a price-earnings ratio by dividing the known current price by unknown future earnings."
"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."
"Investment is most intelligent when it is most businesslike."
"The best values today are often found in the stocks that were once hot and have since gone cold."
"At heart, 'uncertainty' and 'investing' are synonyms."
"The intelligent investor should recognize that market panics can create great prices for good companies and good prices for great companies."
"Investing isn’t about beating others at their game. It’s about controlling yourself at your own game."
"Mr. Market does not always price stocks the way an appraiser or a private buyer would value a business. Instead, when stocks are going up, he happily pays more than their objective value; and, when they are going down, he is desperate to dump them for less than their true worth."
"There is a close logical connection between the concept of a safety margin and the principle of diversification."
