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

The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). The intelligent investor is a realist who sells to optimists and buys from pessimists.

The underlying principles of sound investment should not alter from decade to decade, but the application of these principles must be adapted to significant changes in the financial mechanisms and climate.

Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.

Investing is most intelligent when it is most businesslike.

Buy not on optimism, but on arithmetic.

If you are shopping for common stocks, choose them the way you would buy groceries, not the way you would buy perfume.