Benjamin Graham
Benjamin Graham
Benjamin Grahamwas a British-born American economist and professional investor. Graham is considered the father of value investing, an investment approach he began teaching at Columbia Business School in 1928 and subsequently refined with David Dodd through various editions of their famous book Security Analysis. Graham had many disciples in his lifetime, a number of whom went on to become successful investors themselves. Graham's most well-known disciples include Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss, among others...
NationalityAmerican
ProfessionEntrepreneur
Date of Birth8 May 1894
CountryUnited States of America
Benjamin Graham quotes about
Speculative stock movements are carried too far in both directions, frequently in the general market and at all times in at least some of the individual issues.
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.
The ideal form of common stock analysis leads to a valuation of the issue which can be compared with the current price to determine whether or not the security is an attractive purchase.
In other words, the market is not a weighing machine, on which the value of each issue is recorded by an exact and impersonal mechanism, in accordance with its specific qualities. Rather should we say that the market is a voting machine, whereon countless individuals register choices which are the product partly of reason and partly of emotion.
Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.
The purchase of a bargain issue presupposes that the market's current appraisal is wrong, or at least that the buyer's idea of value is more likely to be right than the market's. In this process the investor sets his judgement against that of the market. To some this may seem arrogant or foolhardy.
Even defensive portfolios should be changed from time to time, especially if the securities purchased have an apparently excessive advance and can be replaced by issues much more reasonable priced.
We define a bargain issue as one which, on the basis of facts established by analysis, appears to be worth considerably more that it is selling for.
Successful investing professionals are disciplined and consistent and they think a great deal about what they do and how they do it.
A speculator gambles that a stock will go up in price because somebody else will pay even more for it.
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.
The most striking thing about Graham's discussion of how to allocate your assets between stocks and bonds is that he never mentions the word "age".
The beauty of periodic rebalancing is that it forces you to base your investing decisions on a simple, objective standard.