Benjamin Graham: Stock

“The investor 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."”

Benjamin Graham

Source: The Intelligent Investor: The Classic Text on Value Investing (1949), Chapter II, The Investor and Stock-Market Fluctuations, p. 43

Reading

“Nearly everyone interested in common stocks wants to be told by someone else what he thinks the market is going to do. The demand being there, it must be supplied.”

Benjamin Graham

Source: The Intelligent Investor: The Classic Text on Value Investing (1949), Chapter III, The Investor and His Advisers, p. 48

Thinking

“The history of the past fifty years, and longer, indicates that a diversified holding of representative common stocks will prove more profitable over a stretch of years than a bond portfolio, with one important provisio—that the shares must be purchased at reasonable market levels, that is, levels that are reasonable in the light of fairly well-defined standards derived from past experience.”

Benjamin Graham

Source: The Intelligent Investor: The Classic Text on Value Investing (1949), Chapter I, What the Intelligent Investor Can Accomplish, p. 7

History , Light , Past

“The true investor scarcely ever has to sell his shares, and at all other times he is free di disregard the current price quotation. He need pay attention to it and act upon it only to the extent that it suits his book, and no more. Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all, for he would then be spared the mental anguish caused him by other persons mistakes of judgement.”

Benjamin Graham

Source: The Intelligent Investor: The Classic Text on Value Investing (1949), Chapter II, The Investor and Stock-Market Fluctuations, p. 40

Books , Time , Personality

“The graph does show one tremendous rise and collapse which stands out starkly from all the other fluctuations. This is commonly called the "new era" stock market of 1927-33. The striking feature of this phenomenon was that the new era existed solely in the minds of market speculators. The whole episode, in retrospect, now seems to have been one of those rare manifestations of mass financial madness which we used to study in our history books under the titles of "the South Sea Bubble", "the Mississippi Bubble" and so on.”

Benjamin Graham

Source: The Intelligent Investor: The Classic Text on Value Investing (1949), Chapter II, The Investor and Stock-Market Fluctuations, p. 36

Books , History , Study , Sea

“Intelligent investment is more a matter of mental approach than it is of technique. A sound mental approach toward stock fluctuations is the touchstone of all successful investment under present-day conditions.”

Benjamin Graham

Source: The Intelligent Investor: The Classic Text on Value Investing (1949), Chapter II, The Investor and Stock-Market Fluctuations, p. 21

Intelligence , Success

“A price decline is of no real importance to the bona fide investor unless it is either very substantial—say, more than a third from cost—or unless it reflects a known deterioration of consequence in the company's position. In a well-defined bear market many sound common stocks sell temporarily at extraordinary low prices. It is possible that the investor may then have a paper loss of fully 50 per cent on some of his holdings, without any convincing indication that the underlying values have been permanently affected.”

Benjamin Graham

Source: The Intelligent Investor: The Classic Text on Value Investing (1949), Chapter II, The Investor and Stock-Market Fluctuations, p. 25

Loss

“Basically, price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal. At other times he will do better if he forgets about the stock market and pays attention to his dividend returns and to the operating results of his companies.”

Benjamin Graham

Source: The Intelligent Investor: The Classic Text on Value Investing (1949), Chapter II, The Investor and Stock-Market Fluctuations, p. 42

Time , Forgetting

“The genuine investor in common stocks does not need a great equipment of brain and knowledge, but he does need some unusual qualities of character”

Benjamin Graham

Source: The Intelligent Investor: The Classic Text on Value Investing (1949), Chapter I, What the Intelligent Investor Can Accomplish, p. 8

Knowledge

“Nothing in finance is more fatuous and harmful, in our opinion, than the firmly established attitude of common stock investors regarding questions of corporate management. That attitude is summed up in the phrase: "If you don't like the management, sell your stock." […] The public owners seem to have abdicated all claim to control over the paid superintendents of their property”

Benjamin Graham

Source: The Intelligent Investor: The Classic Text on Value Investing (1949), Chapter I, What the Intelligent Investor Can Accomplish, p. 18

Question

“The investor has the benefit of the stock market's daily and changing appraisal of his holdings, for whatever that appraisal may be worth, and, second, that the investor is able to increase or decrease his investment at the market's daily figure—if he chooses. Thus the existence of a quoted market gives the investor certain options which he does not have if his security is unquoted. But it does not impose the current quotation on an investor who prefers to take his idea of value from some other source.”

Benjamin Graham

Source: The Intelligent Investor: The Classic Text on Value Investing (1949), Chapter II, The Investor and Stock-Market Fluctuations, p. 41

Quotes , Idea , Change

“If General Motors is worth $60 a share to an investor it must be because the full common-stock ownership of this gigantic enterprise as a whole is worth 43 million (shares) times $60, or no less than $2,600 million.”

Benjamin Graham

Source: The Intelligent Investor: The Classic Text on Value Investing (1949), Chapter II, The Investor and Stock-Market Fluctuations, p. 39

Time

“Stocks can be dynamite.”

Benjamin Graham

Source: The Intelligent Investor: The Classic Text on Value Investing (1949), Chapter I, What the Intelligent Investor Can Accomplish, p. 8