Quotes from Benjamin Graham

intelligent investor designates a tiny portion of her total portfolio as a "mad money" account. For most of us, 10% of our overall wealth is the maximum permissible amount to put at speculative risk. Never mingle the money in your speculative account with what's in your investment accounts; never allow your speculative thinking to spill over into your investing activities; and never put more than 10% of your assets into your mad money account, no matter what happens.

As the Danish philosopher Søren Kierkegaard noted, life can only be understood backwards—but it must be lived forwards. Looking back, you can always see exactly when you should have bought and sold your stocks. But don't let that fool you into thinking you can see, in real time, just when to get in and out.

Take the five stocks in the Dow Jones Industrial Average with the lowest stock prices and highest dividend yields. Discard the one with the lowest price. Put 40% of your money in the stock with the second-lowest price. Put 20% in each of the three remaining stocks. One year later, sort the Dow the same way and reset the portfolio according to steps 1 through 4. Repeat until wealthy. Over

Streisand, the day-trading diva, personified the way people abuse Lynch's teachings. In 1999 she burbled, "We go to Starbucks every day, so I buy Starbucks stock." But the Funny Girl forgot that no matter how much you love those tall skinny lattes, you still have to analyze Starbucks's financial statements and make sure the stock isn't even more overpriced than the coffee.

The rate of return sought should be dependent, rather, on the amount of intelligent effort the investor is willing and able to bring to bear on his task. The minimum return goes to our passive investor, who wants both safety and freedom from concern. The maximum return would be realized by the alert and enterprising investor who exercises maximum intelligence and skill.

Why should not the effects of changing interest rates be divided on some practical and equitable basis between the borrower and the lender? One possibility would be to sell long-term bonds with interest payments that vary with an appropriate index of the going rate.

If you receive a 2% raise in a year when inflation runs at 4%, you will almost certainly feel better than you will if you take a 2% pay cut during a year when inflation is zero. Yet both changes in your salary leave you in a virtually identical position—2% worse off after inflation. So long as the nominal (or absolute) change is positive, we view it as a good thing—even if the real (or after-inflation) result is negative.

the investor's chief problem—and even his worst enemy—is likely to be himself. ("The fault, dear investor, is not in our stars—and not in our stocks—but in ourselves….")

Jak jsme se pou?ili? V krátkém období se trh Grahamovým princip?m vysmívá, ale v dlouhém období se jim vždy dostane rehabilitace. Jestliže nakupujete akcie jen proto, že jejich cena roste - místo toho, abyste se ptali, zda se zvyÅ¡ue fundamentální hodnota spole?nosti-eminenta - bude vás to dÃ…â"¢íve nebo pozdÄ›ji Å¡erednÄ› mrzet. To není jen pravdÄ›podobnost. To je jistota.

to the enterprising investor. He might be interested in special opportunities of the following kinds: Tax-free New Housing Authority bonds effectively guaranteed by the United States government. Taxable but high-yielding New Community bonds, also guaranteed by the United States government. Tax-free industrial bonds issued by municipalities, but serviced by lease payments made by strong corporations.

From these two broad examples we draw two morals for our readers: Obvious prospects for physical growth in a business do not translate into obvious profits for investors. The experts do not have dependable ways of selecting and concentrating on the most promising companies in the most promising industries.

He should never buy a stock because it has gone up or sell one because it has gone down. He would not be far wrong if this motto read more simply: "Never buy a stock immediately after a substantial rise or sell one immediately after a substantial drop.

First of all, recognize that an index fund—which owns all the stocks in the market, all the time, without any pretense of being able to select the "best" and avoid the "worst"—will beat most funds over the long run.

What else should you watch for? Most fund buyers look at past performance first, then at the manager's reputation, then at the riskiness of the fund, and finally (if ever) at the fund's expenses. The intelligent investor looks at those same things—but in the opposite order.

Antes de lanzarse a una incursión de ese tipo, el inversor debería estar seguro de sí mismo y de sus asesores, en especial a la hora de determinar si tienen una clara concepción de las diferencias existentes entre la inversión y la especulación y entre el precio de mercado y el valor subyacente.

It casts some little doubt in my mind as to the complete dependability of the popular belief among analysts that prominent and promising companies will now always sell at high price-earnings ratios—that this is a fundamental fact of life for investors and they may as well accept and like it. I have no desire at all to be dogmatic on this point. All I can say is that it is not settled in my mind, and each of you must seek to settle it for yourself.

Our study of the various methods has led us to suggest a foreshortened and quite simple formula for the valuation of growth stocks, which is intended to produce figures fairly close to those resulting from the more refined mathematical calculations. Our formula is: Value = Current (Normal) Earnings × (8.5 plus twice the expected annual growth rate) The growth figure should be that expected over the next seven to ten years.

All of human unhappiness comes from one single thing: not knowing how to remain at rest in a room. —Blaise Pascal

podía calcular los movimientos de los cuerpos celestiales, pero no la locura de la gente». Newton

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. In the end, what matters isn't crossing the finish line before anybody else but just making sure that you do cross it.

you will never know the joy of success until you have experience the joy of failure.

But if a broker ever tries to sell you an individual mortgage bond or "CMO," tell him you are late for an appointment with your proctologist.

Each company should have a long record of continuous dividend payments. (All the issues in the Dow Jones Industrial Average met this dividend requirement in 1971.) To be specific on this point we would suggest the requirement of continuous dividend payments beginning at least in 1950.

An offering of New Housing issues in July 1971 yielded as high as 5.8%, free from both Federal and state taxes, while an issue of (taxable) New Community debentures sold in September