Benjamin Graham

A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.

The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). The intelligent investor is a realist who sells to optimists and buys from pessimists.

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.

No matter how careful you are, the one risk no investor can ever eliminate is the risk of being wrong. Only by insisting on what Graham called the “margin of safety”—never overpaying, no matter how exciting an investment seems to be—can you minimize your odds of error.

Investment versus Speculation

everyone who buys or sells a security has become an investor, regardless of what he buys, or for what purpose, or at what price,

Only 4% thought common stock would offer a “satisfactory”

return; 26% considered it “not safe” or a “gamble.

and the entire stock-buying public into “investors.”

distinction between investment and speculation in common stocks has always been a useful

some speculation is necessary and unavoidable, for in many common-stock situations there are substantial possibilities of both profit and loss, and the risks therein