Legendary value investors' secrets
November 22, 2024
“Woody Allen once explained that the advantage of being bi-sexual is that it doubles your chance of finding a date on Saturday night,” Warren Buffett said in his FY2015 letter to Berkshire Hathaway. Why did the Berkshire Hathaway chairman say this? “In like manner – well, not exactly like manner – our appetite for either…
Read More about When it comes to stocks, Berkshire Hathaway looks for wonderful companiesIt 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 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“For it is, so to speak, a game of Snap, of Old Maid, of Musical Chairs — a pastime in which he is victor who says Snap neither too soon nor too late, who passed the Old Maid to his neighbour before the game is over, who secures a chair for himself when the music…
Read More about A game of Snap, of Old Maid, of Musical Chairs – John Maynard KeynesTime: May 17, 1984. Legendary investor Warren Buffett was making a speech at a seminar at Columbia Business School to celebrate the 50th Anniversary of the publication of Benjamin Graham and David Dodd’s Security Analysis. A blurb in the article, The Superinvestors of Graham-and-Doddsville (By Warren E. Buffett), based on the speech by Warren Buffett,…
Read More about How the Superinvestors did itIn 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…
Read More about Charlie Munger’s “lollapalooza effect” conceptLegendary 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…
Read More about Mr Market a Drunken Psycho: Warren Buffett