Never forget to account for the psychology of the investor.
"You can have an extraordinary difference in the price level mainly because not only speculators but because investors themselves are looking at the situation through rose colored glasses rather than dark blue glasses."
— Benjamin Graham
Debt be damned.
"He believed in cash. He did not like companies that had a lot of bonds."
— Irving Khan
Think long term.
"One sentence changed my life...Ben Graham opened the course by saying: 'If you want to make money in Wall Street you must have the proper psychological attitude. No one expresses it better than Spinoza the philosopher.'
When he said that, I nearly jumped out of my course. What? I suddenly look up, and he said, and I remember exactly what he said: 'Spinoza said you must look at things in the aspect of eternity.' And that’s what suddenly hooked me on Ben Graham."
— Marshall Weinberg
Comb through balance sheets.
"I remember years ago that they’d (Ben Graham and Walter Schloss) look through the manuals and tear sheets, it’s not so different from today, for years my dad and I, we’d go through value line and we’d look and try to find the stock that was the best value within each industry group."
— Edwin Schloss, Walter Schloss' son
Fundamentals.... and forget the rest.
"(Ben Graham) was a powerful influence on me immediately, which later even (led me) to be an empiricist and look at the data and not be influenced by what you heard around you. That was very clear, just be interested in fundamentals and forget all the rest, and have patience. "
— Marshall Weinberg
Diversify your assets.
"He (Graham) bought a little of everything. So he was widely diversified, which was not the style that I would go for."
— Warren Buffett
Be willing to buy something no one else wants, cheaply.
"I think he talked about risk based on the fact that he wanted to buy something at less than $0.50 on the dollar. He just wanted to buy something that was undervalued.
He was very aware that he was going against the tide. He was buying companies that were trouble, he was willing to buy something that nobody else wanted."
—Edwin Schloss, Walter Schloss' son
Be an activist investor.
"He believed that you could become an activist in Wall Street and benefit. A lot of companies were not operating on all their cylinders like they should, and you could push ‘em into doing more which would in itself benefit society."
— Henry Schneider
BONUS: Graham on Wall Street consensus.
Once, at a lecture, he was asked if Wall Street professionals were better at forecasting what would happen to market, and if not, then why, and here's what he said:
"Well, we’ve been following that same question for a generation or more, and I must say frankly that our studies indicate that you have your choice between tossing coins and taking the consensus of expert opinion and the result is just about the same in each case.
Everybody in Wall Street is so smart that their brilliance offsets each other. And that whatever they know is already reflected in the level of stock prices for the much, and consequently what happens in the future represents what they don’t know."
