Graham on Risk

Since I am giving a presentation about Risk just about . . .  Now . . . I thought it might be a good time to reference a classic quote on the subject:

“It has been an old and sound principle that those who cannot afford to take risks should be content with a relatively low return on their invested funds. From this there has developed the general notion that the rate of return which the investor should aim for is more or less proportionate to the degree of risk he is ready to run. Our view is different. The rate of return sought should be dependent, rather, on the amount of intelligent effort the investor is willing and able to bear on his task.”

—-Benjamin Graham, The Intelligent Investor (New York: HarperBusiness, 2003), p. 88.

I agree with the philosophy, but it has taken me to a rather different place than I believe Graham was referencing . . .