Quotes About Analysis

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.

Investment must always consider the price as well as the quality of the security.

An investment operation is one that can be justified on both qualitative and quantitative grounds.

If they follow our prescription they will confine themselves to high-grade bonds and the common stocks of leading corporations, preferably those that can be purchased at individual price levels that are not high in the light of experience and analysis.

follow the behavioral and business

Know what you are doing—know your business." For the investor this means: Do not try to make "business profits" out of securities

Do not enter upon an operation—

Benjamin Graham

what Graham called "quotational" values

Obvious prospects for physical growth in a business do not translate into obvious profits for investors

we say that to have a true investment there must be present a true margin of safety. And a true margin of safety is one that can be demonstrated by figures, by persuasive reasoning, and by reference to a body of actual experience.

After all," he may say, "the rules you have outlined are pretty simple and easygoing. A highly trained analyst ought to be able to use all his skill and techniques to improve substantially on something as obvious as the Dow Jones list. If not, what good are all his statistics, calculations, and pontifical judgments?

Benjamin Graham

In the financial markets, hindsight is forever 20/20, but foresight is legally blind.

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 investor should impose some limit on the price he will pay for an issue in relation to its average earnings over, say, the past seven years. We suggest that this limit be set at 25 times such average earnings, and not more than 20 times those of the last twelve-month period.

Read backwards. When you research a company's financial reports, start reading on the last page and slowly work your way toward the front. Anything that the company doesn't want you to find is buried in the back—which is precisely why you should look there first.

1970 1969 Share earningsa $5.20 $5.58

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.7

One technique that can be helpful: See which leading professional money managers own the same stocks you do. If one or two names keep turning up, go to the websites of those fund companies and download their most recent reports. By seeing which other stocks these investors own, you can learn more about what qualities they have in common; by reading the managers' commentary, you may get ideas on how to improve your own approach.

The work of a financial analyst falls somewhere in the middle between that of a mathematician and of an orator.

Jeremy Siegel's Stocks for the Long Run (1994)—culminating

Security analysis, as a study, must necessarily concern itself as much as possible with principles and methods which are valid at all times—or, at least, under all ordinary conditions.

You should always plan your battles form the enemy's point of view.