Legendary value investors' secrets
December 22, 2024
“To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What is needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework.” These words came from legendary investor Warren Buffett, the best known disciple of Benjamin Graham, the…
Read More about The Intelligent Investor“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?“What are the matters about which the investor should learn if he is to obtain the type of investment which in a few years might show a gain of several hundred per cent, or over a longer period of time might show a correspondingly greater increase? ” In other words, what attributes should a company have to give…
Read More about What stocks to buy: 15 points to look for1. Don’t overstress diversification Investors have been so oversold on diversification that fear of having too many eggs in one basket has caused them to put far too little into companies they thoroughly know and far too much in others about which they know nothing at all. “It never seems to occur to them, and…
Read More about Philip Fisher’s five more don’ts for investorsCommon Stocks and Uncommon Profits by Philip Fisher lists five don’ts for investors 1. Don’t buy into promotional companies All too often, young promotional companies are dominated by one or two individuals who have great talent for certain phases of business procedure but are lacking in other equally essential talents. They may be superb salesmen…
Read More about Five don’ts for investors: Philip FisherFor a man like Berkshire Hathaway chairman Warren Buffett who doesn’t personally own an iPhone, one wonders why he more than doubled Berkshire Hathaway’s holdings in Apple to about 2.5 per cent in January 2017. At that point, Mr Buffett owned US$17 billion worth of the tech giant’s stock In a CNBC report on 27…
Read More about Philip Fisher’s scuttlebutt methodIn 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 averagingIt 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…
Read More about Seven stock investing mistakes to avoid: Pat DorseyIn 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 Investment