Benjamin Graham’s book – The Intelligent Investor is regarded as the Holy Bible of Value Investing. Even the master investor Warren Buffett has a very high regard for the book and refers to it as the best book that has ever been written on investing.
It has even been said that if you have to chose just one book on investing, it should be this one.
As for me, I have read this book quite a few times. Infact, I have made it a sort of annual ritual to go through it every January. 🙂
Sometime back, I found a large collection of quotes from this book here. So here I share a few of the better ones in this post:
- The sillier the market’s behaviour, the greater the opportunity for the business like investor.
- The intelligent investor is a realist who sells to optimists and buys from pessimists.
- No matter how careful you are, the one risk no investor can ever eliminate is the risk of being wrong.
- By developing your discipline and courage, you can refuse to let other people’s mood swings govern your financial destiny. In the end, how your investments behave is much less important than how you behave.
- No statement is truer and better applicable to Wall Street than the famous warning of Santayana: “Those who do not remember the past are condemned to repeat it”.
- The defensive investor will place chief emphasis on the avoidance of serious mistakes or losses. His second aim will be freedom from effort, annoyance, and the need for making frequent decisions.
- To enjoy a reasonable chance for continued better than average results, the investor must follow policies which are (1) inherently sound and promising, and (2) not popular on Wall Street.
- 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.
- People who invest make money for themselves; people who speculate make money for their brokers.
- The beauty of periodic rebalancing is that it forces you to base your investing decisions on a simple, objective standard.
- There is no reason to feel any shame in hiring someone to pick stocks or mutual funds for you. But there’s one responsibility that you must never delegate. You, and no one but you, must investigate whether an adviser is trustworthy and charges reasonable fees.
- Thousands of people have tried, and the evidence is clear: The more you trade, the less you keep.
- In the financial markets, hindsight is forever 20/20, but foresight is legally blind. And thus, for most investors, market timing is a practical and emotional impossibility.
- A great company is not a great investment if you pay too much for the stock.
- It is absurd to think that the general public can ever make money out of market forecasts.
- It should be remembered that a decline of 50% fully offsets a preceding advance of 100%.
- Even the intelligent investor is likely to need considerable will power to keep from following the crowd.
- 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.
- Always remember that market quotations are there for convenience, either to be taken advantage of or to be ignored.
- Nothing important on Wall Street can be counted on to occur exactly in the same way as it happened before.
- Mr. Market does not always price stocks the way an appraiser or a private buyer would value a business. Instead, when stocks are going up, he happily pays more than their objective value; and, when they are going down, he is desperate to dump them for less than their true worth.
- The intelligent investor shouldn’t ignore Mr. Market entirely. Instead, you should do business with him – but only to the extent that it serves your interests.
- Mr. Market’s job is to provide you with prices; your job is to decide whether it is to your advantage to act on them. You do not have to trade with him just because he constantly begs you to.
- The best way to measure your investing success is not by whether you’re beating the market but by whether you have put in place a financial plan and a behavioural discipline that are likely to get you where you want to go.
- High valuations entail high risks.
- A defensive investor can always prosper by looking patiently and calmly through the wreckage of a bear market.
- The best values today are often found in the stocks that were once hot and have since gone cold.
- It’s nonsensical to derive a Price/Earnings ratio by dividing the known current price by unknown future earnings.
- Wall Street has a few prudent principles; the trouble is that they are always forgotten when they are most needed.
- Although there are good and bad companies, there is no such thing as a good stock; there are only good stock prices, which come and go.
- In the short run the market is a voting machine, but in the long run it is a weighing machine.
- The intelligent investor should recognize that market panics can create great prices for good companies and good prices for great companies.
- Losing some money is an inevitable part of investing, and there’s nothing you can do to prevent it. But to be an intelligent investor, you must take responsibility for ensuring that you never lose most or all of your money.
- By refusing to pay too much for an investment, you minimize the chances that your wealth will ever disappear or suddenly be destroyed.
- Before you invest, you must ensure that you have realistically assessed your probability of being right and how you will react to the consequences of being wrong.
- Successful investing is about managing risk, not avoiding it.
- Without a saving faith in the future, no one would ever invest at all. To be an investor, you must be a believer in a better tomorrow.
Have you read it? What are your thoughts?
I got a mail from a reader yesterday suggesting that I should have added something else to my previous post apart from just quoting Charlie’s words.
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