Legendary value investors' secrets
December 31, 2024
“An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.” Source: Benjamin Graham, “The Intelligent Investor”
Read More about What is speculation?“You don’t try and buy businesses worth $83 million for $80 million. You leave yourself an enormous margin (of safety). When you build a bridge, you insist it can carry 30,000 pounds, but you only drive 10,000-pound trucks across it. And that same principle works in investing. ” – Warren Buffett on what Benjamin Graham,…
Read More about Margin of safety“In the short run, the market is a voting machine; in the long run, however, it becomes a weighing machine.” – Benjamin Graham Legendary value investor Warren Buffett, the chairman of Berkshire Hathaway, once again cited the abovementioned maxim of Benjamin Graham in his FY2017 letter to shareholders. What is so endearing about this quote…
Read More about Warren Buffett: Don’t treat marketable common stocks as ticker symbols“An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.” – Benjamin Graham, “The Intelligent Investor” Benjamin Graham, widely known as the father of value investing, said that “outright speculation is neither illegal, immoral, nor (for most people) fattening to the pocketbook”….
Read More about Investment versus Speculation“The years ahead will occasionally deliver major market declines – even panics – that will affect virtually all stocks,” Warren Buffett said in his FY2016 letter to Berkshire Hathaway shareholders. “No one can tell you when these traumas will occur – not me, not Charlie, not economists, not the media. Meg McConnell of the New…
Read More about Warren Buffett: Two things to remember during scary periodsIn Chapter 5 (The Defensive Investor and Common Stocks) of The Intelligent Investor, Benjamin Graham, the father of value investing, touched on various aspects of defensive investment, among which was dollar-cost averaging, an application of a “formula investment”. Elaborating, he said: “The New York Stock Exchange has put considerable effort into popularizing its ‘monthly purchase…
Read More about Benjamin Graham on dollar-cost averagingIn 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…
Read More about Benjamin Graham Theory Of DiversificationBenjamin Graham (May 8, 1894 – September 21, 1976), the father of value investing, summed up the secret of sound investment in three words: margin of safety. This was in his book, The Intelligent Investor. Warren Buffett, Benjamin Graham’s most famous disciple, explained his mentor’s margin of safety concept this way (Source: The Superinvestors of…
Read More about Margin of Safety: Secret of Sound InvestmentThe Intelligent Investor Chapter 14 – Stock Selection for the Defensive Investor 1. Adequate Size of the Enterprise The idea is to exclude small companies which may be subject to more than average vicissitudes especially in the industrial field. Not less than US$100 million of annual sales for an industrial company and, not less than…
Read More about Benjamin Graham on stock selection for the defensive investorIn Chapter 1 of The Intelligent Investor, author Benjamin Graham (May 8, 1894 – September 21, 1976), the father of value investing, made a clear distinction between the term “investor” and “speculator“. Benjamin Graham, as far back as 1934, said in Security Analysis (a book he co-authored): “An investment operation is one which, upon thorough…
Read More about Investment versus speculation