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Benjamin Graham's investment principles
Benjamin Graham's quotes:

​The genius who changed investing forever.

"An intelligent investor is a realist who buys from pessimists and sells to optimists."

"Successful investment is about managing risk and not avoiding it."

"If you are shopping for common stocks, buy the way in which you would buy groceries- not the way in which you buy perfume."

"A stock is an ownership interest in an actual business, with an underying value that does not depend on it's share price."

"An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative."

"Most of the time stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of ingrained tendency of most people to speculate or gamble... too give away to hope, fear and greed."

"The investor should act consistently as an investor and not as an speculator."

"The stock investor is neither right or wrong because others agreed or disagreed with him; he is right because his facts and analysis are right."

"Wall street people learn nothing and forget everything."

"As in roulette, same is true of the stock trader, who will find that the expense of trading weights the dice against him."

"The investors 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."

"If the reason people invest is to make money, then in seeking advice they are asking others to tell them how to make money- that idea has some element of naivete."

"In the short run the stock market is a voting machine, but in the long run it is a weighing machine."

"Invest only if you would be comfortable owning a stock even if you had no way of knowing its daily share price."

"Investing is most intelligent when it is most business like."

"The best values today are often found in the stocks that were once hot and have since gone cold."

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

“People who invest make money for themselves; people who speculate make money for their brokers.”

“you must thoroughly analyze a company, and the soundness of its underlying businesses, before you buy its stock; you must deliberately protect yourself against serious losses; you must aspire to “adequate,” not extraordinary, performance.”

“You will be much more in control, if you realize how much you are not in control.”

“The investment world nevertheless has enough liars, cheaters, and thieves to keep Satan's check-in clerks frantically busy for decades to come.”

"To achieve satisfactor investment results is easier than most people realise; to achieve superior results is harder than it looks."

"You must never delude yourself into thinking you're investing when you are speculating."

"Individuals who cannot manage their emotions are ill-suited to manage the investment process."

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

"The most realistic distinction between an investor and a speculator is found in their attitude towards the stock-market movements. The speculators primary interest lies in anticipating and profiting from market fluctuations. The investors primary interest lies in holding suitable securities at suitable prices. Market movements are important to him in a practical sense because they alternatively create low price at which he would be wise to buy and high price levels at which he should refrain from buying and probably would be wise to sell."
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"With every new wave of optimism or pessimism, we are ready to abandon history and time-tested principles, but we cling tenaciously and unquestioningly to our prejudices."
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Summarizing buying businesses 

"The most realistic distinction between the investor and the speculator is found in their attitude toward stock-market movements. The speculator’s primary interest lies in anticipating and profiting from market fluctuations. The investor’s primary interest lies in acquiring and holding suitable securities at suitable prices. Market movements are important to him in a practical sense, because they alternately create low price levels at which he would be wise to buy and high price levels at which he certainly should refrain from buying and probably would be wise to sell. It is far from certain that the typical investor should regularly hold off buying until low market levels appear, because this may involve a long wait, very likely the loss of income, and the possible missing of investment opportunities. On the whole it may be better for the investor to do his stock buying whenever he has money to put in stocks, except when the general market level is much higher than can be justified by well-established standards of value.

If he wants to be shrewd he can look for the ever-present bargain opportunities in individual securities. Aside from forecasting the movements of the general market, much effort and ability are directed on Wall Street toward selecting stocks or industrial groups that in matter of price will “do better” than the rest over a fairly short period in the future. Logical as this endeavour may seem, we do not believe it is suited to the needs or temperament of the true investor—particularly since he would be competing with a large number of stock-market traders and first-class financial analysts who are trying to do the same thing. As in all other activities that emphasize price movements first and underlying values second, the work of many intelligent minds constantly engaged in this field tends to be self-neutralizing and self-defeating over the years.

​The investor with a portfolio of sound stocks should expect their prices to fluctuate and should neither be concerned by sizable declines nor become excited by sizable advances. He should always remember that market quotations are there for his convenience, either to be taken advantage of or to be ignored. He should never buy a stock because it has gone up or sell one because it has gone down. He would not be far wrong if this motto read more simply: “Never buy a stock immediately after a substantial rise or sell one immediately after a substantial drop."- Benjamin Graham

Understanding value is where the massive returns come from in investing

Investing in the stock market is a game which is best played by those who are seeking to go against the crowd and are willing to stick to their gut when in comes to making bets. A value investing approach leads to you buying companies are prices which are well below what their true value is. This investment approach allows you to beat the market , if your stock selections are made on pure logic and only that.

​ Value purchases are businesses which seem dirty and rough, businesses which were once hot and have since gone cold within the market. These companies are strong in their financials but are being displayed as businesses which do not fit in to the market. The ability to identify these businesses comes with screening businesses and looking for companies which have under performed yet still hold strong financial merit within the market. 

If you can find a company selling at a low price relative to what it's underlying business indicates it is worth and this company is selling at 1/3 or 1/2 of the value at which the company is truly worth- this is a value investment. These can be found in the market but it takes discipline in the process of finding these companies. Mr. Graham's investing approach was to find businesses which are selling at such low prices that the risk you are putting yourself at is small as if the business is selling at such a low price, the chances are that the market has made a mistake. A true value investor focuses on how to anticipate and find the pricing mistakes that have been made in the market, as this is where the true opportunity lies.

To win in the game of value investing, you need to have some unique traits in character: being able and willing to go against the grain in selecting stocks within the stock market at to be able to stick to your reasoning at all costs. When you have your reasoning right about a security, you need to be able to make sure that you can withstand volatility, this is where a calm temperament comes into investing. Staying calm and relaxed is essential when it comes to investing and also being self aware, never buy or sell a stock on impulse or as a reaction: this is how you lose in the game of investing.

Bruce Greenwald on Benjamin Graham's investment principles

Dirty, scary, cheap, obsecure, under looked, miss priced, bargain securities, old fashioned stocks. Yep, they do beat the market- investing is mostly guts and emotional intelligence. You have to bet against the market to do well in the stock market.

Mr Grahams principles: taught by Bruce Greenwald

Bruce Greenwald has continued to teach Benjamin Graham's investing principles. This video is the Gabelli investing conference, the value that you can take away from this video is massive and you can create massive amounts of wealth by applying these principles to your investing strategy.

The intelligent investor- summary

This book is famously known to be one of the best stock market investing books out there, if you can understand and apply the principles taught in this book to your investing strategy. You are bound to do well in the stock market, the principles are simple, but not easy to apply. 

Security analysis- summary

This book summary will massively aid you in creating huge amounts of wealth, if you can analyze securities independently and the right way- you put yourself in a position to create a lot of wealth.

The interpretation of financial statements

This book will aid you in understanding the language of business, which ultimately leads to you being a better investor. If you properly understand financial statements, you can find great stock options by just reading annual reports. You will not require fancy formulas, you simply need to be able to understand the true value of the business. This is all found in the annual report and this video will aid you in understanding the key points behind finding true value investments- the gems that will allow you to beat the market.

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