Thoughts on valuations

The main underlying principle of value investing is that you should invest in undervalued securities because they alone offer a margin of safety.

—Seth Klarman, American investor

If you have an opinion about the level of prices, it should be an opinion based upon your concept of the values of securities in relation to price, rather than on any prophecy or expectation of changes or of the continuance of a given moment.

—Benjamin Graham, American economist

Nothing turns off an investor more than when an entrepreneur comes in with a ridiculous valuation.

—Kevin Harrington, American entrepreneur

Valuation is vague and arbitrary, when there is no assurance that it will be generally acquiesced in by others.

—Jean-Baptiste Say, French economist

Even a great company can be priced too high if there’s a lot of glamour attached to it.

—Philip Fisher, American investor

Stocks often sell at ridiculously low levels for considerable periods merely because few people know anything about them.

—Philip Carret, American investor

The P/E ratio is only a reflection of what most investors expect to happen at a point in time, and that is neither here nor there in terms of what actually will happen.

—Peter Bernstein, American financial historian

Even the world’s greatest business is not a good investment if the price

is too high.

—Lou Simpson, American investor

Erroneous assumptions can be disastrous.

—Peter F Drucker, Austrian-American management consultant

Not everything that can be counted counts, and not everything that counts can be counted.

—William Bruce Cameron, American professor of sociology

All successful investment involves trying to get into something where

it’s worth more than you’re paying.

—Charlie Munger, American businessman