Quotes from Benjamin Graham

The recurrent excesses of its advances and declines are due at bottom to the fact that, when values are determined chiefly by the outlook, the resultant judgments are not subject to any mathematical controls and are almost inevitably carried to extremes.

Um cínico disse uma vez a G.K. Chesterton, o romancista e ensaísta britânico: "Abençoado seja aquele que nada espera, pois não ficará decepcionado." A réplica de Chesterton? "Abençoado seja aquele que nada espera, pois se deliciará com tudo.

Graham's guideline of owning between 10 and 30 stocks remains a good starting point for investors who want to pick their own stocks, but you must make sure that you are not overexposed to one industry.

The concept of safety can be really useful only if it is based on something more tangible than the psychology of the purchaser.

Mutual funds are the ultimate way for a defensive investor to capture the upside of stock ownership without the downside of having to police your own portfolio.

In the previous four quarters, Yahoo! had racked up $433 million in revenues and $34.9 million in net income. So Yahoo!'s stock was now priced at 263 times revenues and 3,264 times earnings. (Remember that a P/E ratio much above 25 made Graham grimace!)5

The intelligent investor will remember the wise words of financial analyst Mark Schweber: "The one question never to ask a bureaucrat is 'Why?

The ideal way to dollar-cost average is into a portfolio of index funds, which own every stock or bond worth having. That way, you renounce not only the guessing game of where the market is going but which sectors of the market—and which particular stocks or bonds within them—will do the best.

Let's say you can spare $500 a month. By owning and dollar-cost averaging into just three index funds—$300 into one that holds the total U.S. stock market, $100 into one that holds foreign stocks, and $100 into one that holds U.S. bonds—you can ensure that you own almost every investment on the planet that's worth owning.

The future value of every investment is a function of its present price. The higher the price you pay, the lower your return will be.

For most investors, allocating at least 10% of your retirement assets to TIPS is an intelligent way to keep a portion of your money absolutely safe—and entirely beyond the reach of the long, invisible claws of inflation.

In his endeavor to select the most promising stocks either for the near term or the longer future, the investor faces obstacles of two kinds—the first stemming from human fallibility and the second from the nature of his competition. He may be wrong in his estimate of the future; or even if he is right, the current market price may already fully reflect what he is anticipating.

The market made up new standards as it went along, by accepting the current price - however high - as the sole measure of value. Any idea of safety based on this uncritical approach was clearly illusory and replete with danger.

If you buy a stock purely because its price has been going up—instead of asking whether the underlying company's value is increasing—then sooner or later you will be extremely sorry. That's not a likelihood. It is a certainty.

Los que no recuerdan el pasado están condenados a repetirlo».

La mente educada se distingue por no esperar más precisión que la que admite la naturaleza de la cuestión estudiada

There is intelligent speculation as there is intelligent investing. But there are many ways in which speculation may be unintelligent. Of these the foremost are: (1) speculating when you think you are investing; (2) speculating seriously instead of as a pastime, when you lack proper knowledge and skill for it; and (3) risking more money in speculation than you can afford to lose.

particularly as to whether they have a clear concept of the differences between investment and speculation and between market price and underlying value.

while people were drowning in data, knowledge was nowhere to be found.

Buying a bond only for its yield is like getting married only for the sex. If the thing that attracted you in the first place dries up, you'll find yourself asking, "What else is there?" When the answer is "Nothing," spouses and bondholders alike end up with broken hearts.

the famous warning of Santayana: "Those who do not remember the past are condemned to repeat it.

justify our continuing them. Hence from 1939 on our operations were limited to "selfliquidating" situations, related hedges, working-capital bargains, and a few control operations. Each of these classes gave us quite consistently satisfactory results from then on, with the special feature that the related hedges turned in good profits in the bear markets when our "undervalued issues" were not doing so well.

Blessed is he who expecteth nothing, for he shall not be disappointed." Chesterton's rejoinder? "Blessed is he who expecteth nothing, for he shall enjoy everything.

El inversor inteligente es un realista que vende a optimistas y compra a pesimistas.