Author
Benjamin Graham
The same voice, gathered in one place.
Margin of Safety
Confronted with a like challenge to distill the secret of sound investment into three words, we venture the motto, MARGIN OF SAFETY.
Graham reduces sound investing to three words: margin of safety.
Investing · Decision · Wealth · Modern investor letters
Voting Machine and Weighing Machine
The stock market is a voting machine rather than a weighing machine. It responds to factual data not directly but only as they affect the decisions…
Prices reflect human reactions, not precise mechanical valuations.
Investing · Cognition · Human nature · Modern investor letters
Defensive vs. Enterprising
The determining trait of the enterprising (or active, or aggressive) investor is his willingness to devote time and care to the selection of…
The enterprising investor is defined by the willingness to do the work of selection.
Investing · Character · Action · Modern investor letters
Inflation and Stock Prices
There is no close time connection between inflationary (or deflationary) conditions and the movement of common-stock earnings and prices.
Inflation does not move stock earnings and prices on a predictable timetable.
Investing · History · Cognition · Modern investor letters
Mr. Market
If you are a prudent investor or a sensible businessman, will you let Mr. Market’s daily communication determine your view of the value of a $1,000…
The market's daily quote should not determine your view of value.
Investing · Human nature · Decision · Modern investor letters
Diversification and Margin of Safety
Diversification is an established tenet of conservative investment. By accepting it so universally, investors are really demonstrating their…
Diversification is the practical companion of the margin-of-safety principle.
Investing · Decision · Wealth · Modern investor letters
Investment vs. Speculation
An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these…
Investment requires thorough analysis, safety of principal, and a satisfactory return; otherwise it is speculation.
Investing · Decision · Philosophy · Modern investor letters
Intrinsic Value Needs Only Approximation
The essential point is that security analysis does not seek to determine exactly what is the intrinsic value of a given security.
Security analysis seeks an adequate approximation of value, not an exact number.
Investing · Cognition · Decision · Modern investor letters
The Limits of Market Timing
It is our view that stock-market timing cannot be done, with general success, unless the time to buy is related to an attractive price level, as…
Market timing only works when tied to analytically attractive prices, not to market signals alone.
Investing · Decision · Cognition · Modern investor letters
Withstanding Adversity
The rule that a sound investment must be able to withstand adversity seems self-evident enough to be termed a truism.
A sound investment must be able to survive adversity, not just prosper in good times.
Investing · Character · Decision · Modern investor letters