Something I found looking for something else. Looks like a good place to spend some time–if you’re a value investor.
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.
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?