07-14-2003, 1:32 PM | Post #88358 |
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Our friend Jason Zweig (Here Come the Bogleheads) has written a superb book which includes the full 1973 edition of "The Intelligent Investor" by Benjamin Graham together with Jason's explanation and commentary. Here are exerpts for mutual fund investors:
"Graham was not only one of the best investors who ever lived; he was also the greatest practical investment thinker of all times."
"The one risk no investor can ever eliminate is the risk of being wrong."
"The investor's chief problem--and even his worst enemy--is likely to be himself."
"The majority of investment funds, even with all their experienced personnel, have not performed so well as the general market."
"Everyone must keep some assets in the riskless haven of cash."
"It is no difficult trick to bring a great deal of energy, study, and native ability into Wall Street and to end up with losses instead of profits."\
"By speculating instead of investing, you lower your own odds of building wealth and raise someone else's."
"One thing that never suffers a bear market on Wall Street: dopey ideas."
"The case for investing in a REIT fund is weaker if you own a home."
"Allocating at least 10% of your retirement assets to TIPS is intelligent."
"Never forecast the future exclusively by extrapolating the past."
"The only indisputable truth that the past teaches us is that the future will always surprise us--always!"
"The worse the future looks, the better it usually turns out to be."
"The primary cause of failure is that investors pay too much attention to what the stock market is doing currently."
"The key to rebalancing is having a predictable schedule"
"The people who now claim that the next 'sure thing' will be health care, or energy, or real estate, or gold, are not more likely to be right in the end than the hypesters of high tech turned out to be."
"The intelligent investor (unless in the advanced stage of retirement) dreads a bull market, since it makes stocks more costly to buy."
"The future of security prices is never predictable."
"The investor may vary his holding of common stocks between the 25% minimum and the 75% maximum."
"For most investors, intermediate bonds are the simplest choice, since they enable you to get out of the game of guessing what interest rates will do."
"For most investors, bond funds beat individual bonds hands down."
"In most cases, the high expenses of owning an annuity will overwhelm its advantages."
"Selectively adding stocks to an all-bond portfolio can increase its income yield--and raise its potential return."
"Beginning in 1949, the average annual return produced by stocks over the previous 20 years was 3.1%, versus 3.9% for long-term Treasury bonds."
"If you had invested $1 in U.S. stocks in 1900 and spent all your dividends, your portfolio would have grown to $198 by 2000. But if you had reinvested all your dividends, your portfolio would have been worth $16,797." (Stock indexes do not include dividends.)
"It is essential that (the intelligent investor) entrust himself only to firms of the highest reputation."
"The one thing the widow must not do is to take speculative chances in order to 'make some extra income.'"
"We urge the beginner in security buying not to waste his efforts and his money in trying to beat the market."
"A permanent autopilot portfolio, can defend you against the need to dedicate a large part of your life to stock picking."
If you find yourself trading more than twice a year--or spending more than an hour or two per month on your investments--then something has gone badly wrong."
"A defensive investor runs and wins the race by sitting still."
"Your very refusal to be active, and your renunciation of any pretended ability to predict the future, can become your most powerful weapons."
"The ideal way to dollar-cost average is into a portfolio of index funds, which own every stock or bond worth having."
"If you started investing $100/month in September 1929, your money would have grown to $15,571 by August 1939. That's the power of disciplined buying--even in the worst bear market of all time."
"The knowledge of how little you can know about the future, coupled with the acceptance of your ignorance, is an investor's most powerful weapon."
"Alan Greenspan said on January 7, 1973: "It's very rare that you can be as unqualifiedly bullish as you can now." (1973 and 1974 turned out to be the worst years for the stock market since the Great Depression.)"
"For most investors, market timing is a practical and emotional impossibility."
"If and when trouble should come, the owner of foreign obligations has no legal or other means of enforcing his claim."
"A junk-bond fund is only a minor option--not an obligation."
"The more you trade, the less you keep."
"A great company is not a great investment if you pay too much for the stock."
"Investing in foreign stocks may not be mandatory, but it is definitely
Originally posted in thread: 28495