More on the Value Approach

From the Preface to Graham and Dodd’s 1934 classic, Security Analysis:

 . . . we have striven throughout to guard the student against overemphasis upon the superficial and the temporary. Twenty years of varied experience in Wall Street have taught the senior author that this overemphasis is at once a delusion and the nemesis of the world of finance.


Four Principles Jump Out from Zweig’s Note about Graham

Like I said in my previous post, I’ve read The Intelligent Investor (2003) before. I began thumbing through it again. Four items in Jason Zweig’s Note at the beginning struck me in a way they didn’t the last time through, though they are quite obvious (pp. xii-xiii):

  • The intelligent investor is a realist who sells to optimists and buys from pessimists.
  • Only by insisting on what Graham called the “margin of safety”–never overpaying, no matter how exciting an investment seems to be–can you minimize your odds of error.
  • Become a critical thinker who takes no Wall Street “fact” on faith.
  • Finally, Graham became a master at researching stocks in microscopic, almost molecular, detail.

I tend to be an optimist, so I have my work cut out with the first item. The second simply augers for caution–and I can be cautious. I think I can take a pretty good stab at the third. Detail? I like digging. Will I like digging as much as Graham?

And you?

First Step, Get Some Tools

I read Jason Zweig’s 2003 revision of Graham’s The Intelligent Investor a few years ago. I planned on reading it again, but before I did, I realized that I needed to find a good stock screener first. That way, as I read, I could tweak the stock screener to fit my value investing purposes.

After looking at the obvious choices–Google Finance, Yahoo Finance, and a few others–I stumbled upon a nifty little blog post by Jim Fink at Investing Daily titled “Best Stock Screening Tools on the Web.” In it he highly recommended the screener at I agree with him that FinViz’s screener is the most comprehensive free screener on the Web, certainly more comprehensive than the others I looked at. I’ve decided that it will be my screener of choice–at least for now.