--- title: "Meaning & Key Takeaway of: Observation over many years has taught us…" description: "\"Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of good business..." image: "https://sms4smile.com/quotes/i/1f9/benjamin-graham-1531_assuming_observation-over-many-years-has-taught-u_179597.jpg" --- # Observation over many years has taught us that the chief… ![“Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of good business conditions. The purchasers view the good current earnings as equivalent to 'earning power' and assume that prosperity is equivalent to safety.” quote by Benjamin Graham](https://sms4smile.com/quotes/i/1f9/benjamin-graham-1531_assuming_observation-over-many-years-has-taught-u_179597.jpg) [Download](https://sms4smile.com/quotes/i/1f9/benjamin-graham-1531_assuming_observation-over-many-years-has-taught-u_179597.jpg) [Open image](https://sms4smile.com/quotes/i/1f9/benjamin-graham-1531_assuming_observation-over-many-years-has-taught-u_179597.jpg) > “Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of good business conditions. The purchasers view the good current earnings as equivalent to 'earning power' and assume that prosperity is equivalent to safety.” [Benjamin Graham](https://sms4smile.com/quotes/author/benjamin-graham/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. Investors often lose money by buying cheap‑quality assets when markets look strong, mistaking current earnings for lasting safety. **In simple terms:** Buying low‑quality assets in good times leads to losses. Key Takeaway Avoid equating short‑term earnings with long‑term stability. Themes investment risk market cycles valuation behavioral finance risk management Mood cautious analytical Type advisory analytical When to use this quote - portfolio construction - risk assessment - investment strategy Key Concepts mispricing confidence bias earnings quality economic cycles Questions to Reflect On - How do you differentiate earnings quality from temporary performance? - What safeguards can prevent over‑confidence in bullish markets? A Different Perspective Assuming good earnings guarantee safety ignores future downturns. ★ ★ ★ ★ ★ No ratings yet [Assume Prosperity](https://sms4smile.com/quotes/about/assume-prosperity-1924464/) [Assuming](https://sms4smile.com/quotes/about/assuming/) [Business](https://sms4smile.com/quotes/about/business/) [Chiefs](https://sms4smile.com/quotes/about/chiefs/) [Conditions](https://sms4smile.com/quotes/about/conditions/) [Conditions Purchasers](https://sms4smile.com/quotes/about/conditions-purchasers-1924465/) [Currents](https://sms4smile.com/quotes/about/currents/) [Customer](https://sms4smile.com/quotes/about/customer/) [Earning](https://sms4smile.com/quotes/about/earning/) [Good business](https://sms4smile.com/quotes/about/good-business/) [Investing](https://sms4smile.com/quotes/about/investing/) [Investors](https://sms4smile.com/quotes/about/investors/) [Loss](https://sms4smile.com/quotes/about/loss/) [Losses Investors](https://sms4smile.com/quotes/about/losses-investors-1924463/) [Lows](https://sms4smile.com/quotes/about/lows/) [Observation](https://sms4smile.com/quotes/about/observation/) [Prosperity](https://sms4smile.com/quotes/about/prosperity/) [Purchasers](https://sms4smile.com/quotes/about/purchasers/) [Quality](https://sms4smile.com/quotes/about/quality/) [Quality Securities](https://sms4smile.com/quotes/about/quality-securities-885075/) [Safety](https://sms4smile.com/quotes/about/safety/) [Security](https://sms4smile.com/quotes/about/security/) [Taught](https://sms4smile.com/quotes/about/taught/) [Taught us](https://sms4smile.com/quotes/about/taught-us/) [Time](https://sms4smile.com/quotes/about/time/) [Views](https://sms4smile.com/quotes/about/views/) [Wealth](https://sms4smile.com/quotes/about/wealth/) [Years](https://sms4smile.com/quotes/about/years/) ## Related quotes > [The chief losses to investors come from the purchase of low-quality securities at times of favorable business conditions.](https://sms4smile.com/quotes/benjamin-graham/the-chief-losses-to-investors-come-from-the-purchase-of-low-quality/) [Benjamin Graham](https://sms4smile.com/quotes/author/benjamin-graham/) > [However, if one has been playing the buy-and-hold game with quality securities, one has been exposed to a substantial amount of market risk because…](https://sms4smile.com/quotes/michael-burry/however-if-one-has-been-playing-the-buy-and-hold-game-with-quality/) [Michael Burry](https://sms4smile.com/quotes/author/michael-burry/) > [When self-interest inclines a man to print, he should consider that the purchaser expects a pennyworth for his penny, and has reason to asperse…](https://sms4smile.com/quotes/william-shenstone/when-self-interest-inclines-a-man-to-print-he-should-consider-that/) [William Shenstone](https://sms4smile.com/quotes/author/william-shenstone/) > [But even in the absence of direct interference by those who had the power to interfere, the process was usually aborted by the non-availability…](https://sms4smile.com/quotes/immanuel-wallerstein/but-even-in-the-absence-of-direct-interference-by-those-who-had-the/) [Immanuel Wallerstein](https://sms4smile.com/quotes/author/immanuel-wallerstein/) > [We are apt to consider that invention is the result of spontaneous action of some heavenborn genius, whose advent we must patiently wait for,…](https://sms4smile.com/quotes/john-ambrose-fleming/we-are-apt-to-consider-that-invention-is-the-result-of-spontaneous/) [John Ambrose Fleming](https://sms4smile.com/quotes/author/john-ambrose-fleming/) > [Once the government can demand of a publisher the names of the purchasers of his publication, the free press as we know it disappears.…](https://sms4smile.com/quotes/william-o-douglas/once-the-government-can-demand-of-a-publisher-the-names-of-the/) [William O. 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A creditable, if unspectacular, result can be achieved by the lay investor…](https://sms4smile.com/quotes/benjamin-graham/the-art-of-investment-has-one-characteristic-that-is-not-generally/) [Benjamin Graham](https://sms4smile.com/quotes/author/benjamin-graham/) > [We have not known a single person who has consistently or lastingly make money by thus "following the market". We do not hesitate to…](https://sms4smile.com/quotes/benjamin-graham/we-have-not-known-a-single-person-who-has-consistently-or-lastingly/) [Benjamin Graham](https://sms4smile.com/quotes/author/benjamin-graham/) > [The essence of investment management is the management of risks, not the management of returns.](https://sms4smile.com/quotes/benjamin-graham/the-essence-of-investment-management-is-the-management-of-risks-not/) [Benjamin Graham](https://sms4smile.com/quotes/author/benjamin-graham/) > [Wall Street people learn nothing and forget everything.](https://sms4smile.com/quotes/benjamin-graham/wall-street-people-learn-nothing-and-forget-everything/) [Benjamin Graham](https://sms4smile.com/quotes/author/benjamin-graham/) > [In security analysis the prime stress is laid upon protection against untoward events. 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Today, a five-year-old can do it.…](https://sms4smile.com/quotes/benjamin-graham/americans-are-getting-stronger-twenty-years-ago-it-took-two-people-to/) [Benjamin Graham](https://sms4smile.com/quotes/author/benjamin-graham/) [Explore all 229 Benjamin Graham quotes ](https://sms4smile.com/quotes/author/benjamin-graham/) ## More Assuming quotes > [Some books are not read in the right way because they have skipped a stage of opinion, assume a crystallization of information in society…](https://sms4smile.com/quotes/doris-lessing/some-books-are-not-read-in-the-right-way-because-they-have-skipped-a/) [Doris Lessing](https://sms4smile.com/quotes/author/doris-lessing/) > [Our young Marines of today are courageous, willing to make sacrifices, and are marvelous team players. I am confident our Corps, and indeed our…](https://sms4smile.com/quotes/james-t-conway/our-young-marines-of-today-are-courageous-willing-to-make-sacrifices/) [James T. Conway](https://sms4smile.com/quotes/author/james-t-conway/) > [Everyone assumes writers spend their time lounging around, writing and occasionally striking a pose whilst having a think.](https://sms4smile.com/quotes/sara-sheridan/everyone-assumes-writers-spend-their-time-lounging-around-writing-and/) [Sara Sheridan](https://sms4smile.com/quotes/author/sara-sheridan/) > [Islam never differentiates between men and women as regards political rights and puts them on an equal footing. However, even if a woman is…](https://sms4smile.com/quotes/yusuf-al-qaradawi/islam-never-differentiates-between-men-and-women-as-regards-political/) [Yusuf al-Qaradawi](https://sms4smile.com/quotes/author/yusuf-al-qaradawi/) > [Whatever your conscious mind assumes and believes to be true, your subconscious mind will accept and bring to pass. 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Chesterton](https://sms4smile.com/quotes/author/gilbert-k-chesterton/) [Browse all 2,452 Assuming quotes ](https://sms4smile.com/quotes/about/assuming/) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "Quotation", "text": "Observation over many years has taught us that the chief losses to investors come from the purchase of low-quality securities at times of good business conditions. 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