Ben Graham on counting good management twice

[Liberty]

I'm reading Security Analysis (1940 edition) for the first time (I'm a young investor, what can I say  ;D), and there are so many gems, but here's one that I liked and want to share:

 

There is a strong tendency in the stock market to value the management factor twice in its calculations. Stock prices reflect the large earnings which the good management has produced, plus a substantial increment for "good management" considered separately. This amounts to "counting the same trick twice" and it proves a frequent cause of overvaluation.