Benjamin Graham
Benjamin Graham
Benjamin Grahamwas a British-born American economist and professional investor. Graham is considered the father of value investing, an investment approach he began teaching at Columbia Business School in 1928 and subsequently refined with David Dodd through various editions of their famous book Security Analysis. Graham had many disciples in his lifetime, a number of whom went on to become successful investors themselves. Graham's most well-known disciples include Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss, among others...
NationalityAmerican
ProfessionEntrepreneur
Date of Birth8 May 1894
CountryUnited States of America
Benjamin Graham quotes about
It's nonsensical to derive a price/earnings ratio by dividing the known current price by unknown future earnings.
Calculate a stock's price/earnings ratio yourself, using Graham's formula of current price divided by average earnings over the past three years.
It should be remembered that a decline of 50% fully offsets a preceding advance of 100%.
Avoid second-quality issues in making up a portfolio unless they are demonstrable bargains.
The margin of safety is always dependent on the price paid. It will be large at one price, small at some higher price, nonexistent at some still higher price.
To see how much a company is truly earning on the capital it deploys in its businesses, look beyond EPS to Return on Invested Capital (ROIC).
Abnormally good or abnormally bad conditions do not last forever.
It is a fact worth pondering that four centuries ago the evil of "an abundance or surplus" arose from its being kept off the market, while today the evil of surplus lies in its being thrown upon the market.
Successful investment may become substantially a matter of techniques and criteria that are learnable, rather than the product of unique and incommunicable mental powers.
Whether we like it or not, government intervention in the face of surplus is here to stay.
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.
If we assume that there are normal or standard income results to be obtained from investing money in securities, then the role of the adviser can be more readily established. He will use his superior training and experience to protect his clients against mistakes and to make sure that they obtain the results to which their money is entitled.
Good managements produce a good average market price, and bad managements produce bad market prices.
The purchase of a bargain issue presupposes that the market's current appraisal is wrong, or at least that the buyer's idea of value is more likely to be right than the market's. In this process the investor sets his judgement against that of the market. To some this may seem arrogant or foolhardy.