Affected Quote by Benjamin Graham
“A price decline is of no real importance to the bona fide investor unless it is either very substantial say, more than a third from cost or unless it reflects a known deterioration of consequence in the company's position. In a well-defined bear market many sound common stocks sell temporarily at extraordinary low prices. It is possible that the investor may then have a paper loss of fully 50 per cent on some of his holdings, without any convincing indication that the underlying values have been permanently affected.”
About This Quote
Source Book: The Intelligent Investor, Benjamin Graham, 1949
A price drop matters only if it’s large or signals a real decline in the company’s fundamentals; otherwise it may be a temporary market dip.
In simple terms: Only big drops or real problems matter.
Key Takeaway
Ignore small dips; focus on fundamentals.
Themes
investment
valuation
risk management
Mood
cautious
analytical
Type
advisory
analytical
When to use this quote
- portfolio review
- stock selection
- risk assessment
Key Concepts
fundamental analysis
market cycles
Questions to Reflect On
- Is the decline due to market sentiment or company health?
- How much loss is tolerable before acting?
A Different Perspective
A small decline can still be a warning sign if the cause is unknown.
