Macro worries are like sports talk radio. Everyone has a good opinion which probably means that none of them are good.

Ratings agencies are highly conflicted, unimaginative dupes. They are blissfully unaware of adverse selection and moral hazard. Investors should never trust them.

The risk of an investment is described by both the probability and the potential amount of loss. The risk of an investment-the probability of an adverse outcome-is partly inherent in its very nature. A dollar spent on biotechnology research is a riskier investment than a dollar used to purchase utility equipment. The former has both a greater probability of loss and a greater percentage of the investment at stake.

The avoidance of loss is the surest way to ensure a profitable outcome.

The near absence of bargains works as a reverse indicator for us. When we find there is little worth buying, there is probably much worth selling.

Value investors will not invest in businesses that they cannot readily understand or ones they find excessively risky. Hence few value investors will own the shares of technology companies. Many also shun commercial banks, which they consider to have unanalyzable assets, as well as property and casualty insurance companies, which have both unanalyzable assets and liabilities.

Graham's wonderful sentence as, an investor needs only two things: cash and courage. Having only one of them is not enough.