The intelligent investor

Originally published in Wood River Weekly

The Intelligent Investor and Security Analysis, are books published in 1949 and 1934 respectively, authored by the legendary “father of value investing”, Benjamin Graham. Graham was a British-born American economist, professor, and investor. While his life spanned 1894 to 1976, his sound viewpoints on investing still stand today. Warren Buffett, who credits Graham as his mentor, describes The Intelligent Investor as the “the best book about investing ever written.”

Decades before the term “behavioral finance” was common in contemporary parlance, Graham’s philosophy emphasized the impact of psychology on investors’ potential for success or failure.

Here are several of Graham sage and telling quotes that find validity in today’s market and economic environment.

“Successful investing is about managing risk, not avoiding it.”

“Investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”

“To be an investor you must be a believer in a better tomorrow.”

“A great company is not a great investment if you pay too much for the stock.”

“Always buy your straw hats in the winter.”

“An intelligent investor gets satisfaction from the thought that his operations are exactly opposite to those of the crowd.”

“The intelligent investor is a realist who sells to optimists and buys from pessimists.”

“The investor’s chief problem – and even his worst enemy – is likely to be himself.”

“The essence of investment management is the management of risks, not the management of returns.”

“Never buy a stock immediately after a substantial rise or sell one immediately after a substantial drop.”

“Abnormally good or abnormally bad conditions do not last forever.”

“Buy not on optimism, but on arithmetic.”

“High valuations entail high risk.”

“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.”

“Confusing speculation with investment is always a mistake.”

Just shy of a century ago, Graham said, “A sound mental approach toward stock fluctuations is the touchstone of all successful investment under present-day conditions.” More enduring words were never spoken.

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