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Everyone has heard the Buffett quote: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
It’s one of those quotes that gets repeated so often the real message gets mistaken for “if you just do this easy thing, you’ll make a lot of money.” The problem isn’t that it’s hard to buy great companies. It really is easy. You can do it anytime. The hard part is buying them at a fair price. Here’s Graham: Continue Reading…
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I dug up a 1963 lecture by Ben Graham – titled Securities in an Insecure World (linked below) – that popped up online several years ago and thought I’d share a few notes.
In the lecture, Graham discusses three big dangers investors face – nuclear war, inflation, and severe market volatility (specifically drawdowns) – which are the same today. Then he branches off into behavior, market valuation, and asset allocation.
He points out a recurring theme that resurfaces every few years: Continue Reading…
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Long before search engines there was Yahoo!. It was the directory – started as a list of Jerry Yang’s and David Filo’s favorite sites – for the internet before Google took over the world. There was competition – AltaVista, Infoseek, Lycos, and a long list of others – but Yahoo! was it. Anyone who grew up during the internet boom knew about it and used it and, I bet, many secretly still use it today.
But what really made Yahoo! stand out at that time, was something few internet companies ever attained. Profits! It was profitable by the end of 1996. A truly rare feat. It was a dot-com darling at the time, peaking around a $125 billion market cap. This 1999 Fortune article sums up the period well. Continue Reading…
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Ben Graham wrote The Intelligent Investor in 1949, arguably the best investing book of all time. In it, he laid the groundwork for value investing and everything you need to be a successful investor.
He separated price from value. He introduced Mr. Market. He added a margin of safety. He even pushed investors to be more businesslike. And he leaves reminders throughout that successful investing is really a battle against human nature.
But tucked in between his broader message is a depth of wisdom you won’t find in other investing books. I thought I’d share a few random bits and quips from the first quarter of the book. Continue Reading…
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The search for the best returns possible hasn’t changed in centuries. There’s a need to “beat the market” or your peers. It’s human nature. But how you go about doing it is the question.
In 1988 speech, Charlie Ellis explained that superior results are only gained in one of three ways: Continue Reading…
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Earlier this year Wharton released a video where Howard Marks interviewed Joel Greenblatt. It was a short interview packed with wisdom from the two value investors.
Greenblatt first came across value investing after reading Ben Graham, which offered him a new perspective on investing. He defines value investing perfectly:
Figure out what something is worth, pay a lot less, leaving a large margin of safety.
He repeated this definition several times during the interview. Most people never get past the first part, but he offers two guarantees to those that do the work. Continue Reading…