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Legendary value investors' secrets

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December 7, 2021


Seven stock investing mistakes to avoid: Pat Dorsey

It takes many great stock picks to make up for just a few big errors, says Pat Dorsey, author of The Five Rules for Successful Stock Investing. So even before one goes into any analysis process, care should be taken to avoid seven easily avoidable mistakes. Here is Pat Dorsey’s list of seven mistakes to

Benjamin Graham Theory Of Diversification

In investment, having a margin of safety itself is not sufficient.  Why is this so? Benjamin Graham, the founder of value investing, uses the simple basis of the insurance-underwriting business to explain the need for diversification. He said that  diversification is the companion of margin of safety. In other words, margin of safety and diversification

Margin of Safety: Secret of Sound Investment

Benjamin Graham (May 8, 1894 – September 21, 1976), the father of value investing, in his book, The Intelligent Investor, summed up the secret of sound investment in three words: margin of safety. Warren Buffett, Benjamin Graham’s most famous disciple, explained his mentor’s margin of safety concept this way (Source: The Superinvestors of Graham-and-Doddsville by

The Little Book of Common Sense Investing by John C. Bogle

In his letter dated February 27, 2015 (for FY2014) to Berkshire Hathaway shareholders, Warren Buffett says: “Rather than listen to their (advisors’) siren songs, investors – large and small – should instead read Jack Bogle’s The Little Book of Common Sense Investing. “Stock prices will always be far more volatile than cash-equivalent holdings. Over the long

Charlie Munger’s “lollapalooza effect” concept

In stock markets, we hear of this term called “lollapalooza effect”. In mid-2014, for example, when the stock of Apple plummeted at one stage by  40 per cent from a high of $700 to just below  $400, the cause was attributed in some quarters to the “lollapalooza effect”. In a June 2014  article , “Apple Stock Still

Mr Market a Drunken Psycho: Warren Buffett

Legendary investor Warren Buffett,  the Sage of Omaha, recently referred to Mr Market as the “Drunken Psycho”. Aspiring value investors need to know who Mr Market is to understand why Warren Bufftett calls him a Drunken Psycho. Warren Buffett has in a letter to Berkshire Hathaway also called Mr Market the poor fellow with incurable emotional

Economic moats checklist

“A moat is a deep, broad ditch, either dry or filled with water, that surrounds a castle, fortification, building or town, historically to provide it with a preliminary line of defence.” – Wikipedia. Legendary investor Warren Buffett coined the  term “moat” in finance.  A company needs a moat to protect its profitability and to fence itself

Market Value vs Intrinsic Value of a stock

To better understand what “intrinsic value” is for a stock, let’s first look at the stock’s price-earnings ratio , sometimes referred to as  the PER, the P/E ratio or just the P/E. The price (P) in the numerator refers to the price of the stock. The earnings (E) in the denominator refers to the earnings

Are you an intelligent investor?

One great bonus in reading the revised edition of Benjamin Graham’s The Intelligent Investor book is the accompanying commentary for each chapter and even for the introduction by veteran investment writer Jason Zweig. What exactly does Benjamin Graham mean by an “intelligent” investor? “Back in the first edition of this book (The Intelligent Investor), (Benjamin)

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