Benjamin Graham: Brokers Invested
on Friday, April 21, 2023Meaning of Benjamin Graham Money Quote: saying brokers make more money when one speculates, while those who invest earn the money for themselves. Benjamin Graham said:
“People who invest make money for themselves; people who speculate make money for their brokers” — Benjamin Graham
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In this quote, Benjamin Graham is drawing a distinction between “investing” and “speculating”. He suggests that when people “invest”, they are making money for themselves by choosing securities that are undervalued and have long-term potential.
However, when people “speculate”, they are often chasing short-term gains and betting on price movements in the market. According to Graham, speculative behaviors tend to make money “for their brokers” through increased trading activity and commissions rather than benefiting the individual investor themselves.
In essence, Graham is advocating for value-based investing focused on company fundamentals rather than speculative behaviors geared towards unpredictable price fluctuations, which he implies often end up benefiting brokers more through higher fees rather than the investor.
Birthday: May 9, 1894 – Death: September 21, 1976