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Thoughts on Graham?

alacrity · 16 · 3514

alacrity

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on: Dec 29, 2011, 12:24 PM
I've just finished reading "The Intelligent Investor."

And at first blush, it seemed like it was a garden variety book on investing, since most of the things at the first half, I've read on some other books, but when I got to the second half I found that it was really different in the sense that it really is serious and tries it's best to instill a conservative, value oriented approach to investing upon the reader, whereas other books spend only a paragraph or a chapter on being conservative with investing, this book talks about it at almost all of the chapters. Moreover, the book, also seems to ingrain upon the reader that when it comes to value and growth, value should receive the highest appraisal-which is different from what the writings of Peter Lynch say, who seems to place growth slightly before value with all things being equal. 

All in all, however, this was a very good book, it has reminded me that being in my early 20's is not an excuse to be reckless when in comes to investing and I'd probably give it a second readings because it's just that good. :D

So, I'd like to ask, has anyone here tried to commit himself/herself to 100% of Graham's principles when it comes to investing? Or is there a middle ground somewhere that growth and value can meet?


allanmm13

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Reply #1 on: Dec 29, 2011, 12:59 PM
So, I'd like to ask, has anyone here tried to commit himself/herself to 100% of Graham's principles when it comes to investing? Or is there a middle ground somewhere that growth and value can meet?
Warren Bufett
 ... He is a student of Graham..


TSO

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Reply #2 on: Dec 29, 2011, 02:05 PM
@ Alacrity

Graham is best known for being a "cigar butt" investor, and IIRC, he is more interested in the assets of a business more than its growth prospects (ala Philip Fisher), which Buffett innovated on.

This is inherent in his conservative style and his constant approach on "what is safe", and you can see this even on Security Analysis. (Intelligent Investor is S.A. dumbed down for laymen.)

Personally, I don't really consider myself a 100% Graham investor. Why?
1. I actually look into the growth prospects of a target company.
2. I don't rule out companies just because they're not selling at net-nets.
3. Graham may have probably walked into value traps thinking he could influence the management to liquidate. He was known for doing this; we individual investors probably won't be able to even get management to budge.
4. Ben Graham is fully detached from the market. This worked back in the 1940's, but come the 70's -- the decade of his death -- he lamented his defection to the side of market efficiency, which was good enough to prevent superlative earnings from pure, statistical F.A. alone.
5. As an investor, Graham is detached from the management. Buffett, on the other hand, took it seriously. (Forgot where I got this; I could be horrendously wrong here, so this should be confirmed!!!!)


alacrity

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Reply #3 on: Dec 31, 2011, 09:51 PM
@ Alacrity
5. As an investor, Graham is detached from the management. Buffett, on the other hand, took it seriously. (Forgot where I got this; I could be horrendously wrong here, so this should be confirmed!!!!)

Yep, one thing I noticed in the book was that he discussed so little about management. Mind if I ask what you meant by Buffet taking management seriously? I've read quite a number of books but I still consider myself a newbie since finance is way out of my chosen field.


bauer

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Reply #4 on: Jan 02, 2012, 10:31 PM
Buffett will only decide to buy a share in a company after he assessed the qualities of a good management team by:
Direct interviews with them
Checking their lifestyle
Checking their management style
Deep bench of very good managers
Low turn over of management people


alacrity

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Reply #5 on: Jan 03, 2012, 05:27 PM
Buffett will only decide to buy a share in a company after he assessed the qualities of a good management team by:
Direct interviews with them
Checking their lifestyle
Checking their management style
Deep bench of very good managers
Low turn over of management people

I see. Thanks for this.


TSO

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Reply #6 on: Jan 04, 2012, 02:21 AM
@ Bauer,

Precisely! :D



Archcavalier

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Reply #7 on: Jan 08, 2012, 02:20 AM
Try reading "The Tao of WARREN BUFFET".

No. 40
"If principle become dated they're no longer principle."

Buffet changed a lot of the principle Graham though him as it no longer apply during his(Buffet) time.


alacrity

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Reply #8 on: Jan 08, 2012, 11:46 AM
Buffet changed a lot of the principle Graham though him as it no longer apply during his(Buffet) time.

So does that mean he practices only little of the value investing principles that Graham taught him?


Archcavalier

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Reply #9 on: Jan 08, 2012, 12:37 PM
So does that mean he practices only little of the value investing principles that Graham taught him?

better you buy the book...


89er

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Reply #10 on: Jan 15, 2012, 01:00 PM
Intelligent Investor is pound for pound the best book ever written in Investing. The greatest Investor of all time WB is a student of Graham at Columbia. I have read this book several times and has served me well in my stock market Investments.


TSO

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Reply #11 on: Jan 16, 2012, 08:52 AM
So does that mean he practices only little of the value investing principles that Graham taught him?

lol no.

It just means he made his own system BASED on it.

think of it this way. The common principles in VI is the same across the board, but it is merely a foundation of someone else's system. :)


alacrity

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Reply #12 on: Jan 18, 2012, 12:41 PM
think of it this way. The common principles in VI is the same across the board, but it is merely a foundation of someone else's system. :)

Thanks for clarifying.

Do you know of any other successful value investors?


TSO

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Reply #13 on: Jan 18, 2012, 01:24 PM
Tom Russo, Prem Watsa, James Montier, Bruce Greenwald (not sure if he counts), Chuck Akre, Bruce Berkowitz, George Soros, Joel Greenblatt, Seth Klarman, and Tweedy Browne.

Those are the only ones I know of aside from Warby, C. Munger, and B. Graham.


alacrity

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Reply #14 on: Jan 19, 2012, 02:59 PM
Tom Russo, Prem Watsa, James Montier, Bruce Greenwald (not sure if he counts), Chuck Akre, Bruce Berkowitz, George Soros, Joel Greenblatt, Seth Klarman, and Tweedy Browne.

Those are the only ones I know of aside from Warby, C. Munger, and B. Graham.

Thanks again, so many names in here I've never seen before. The one's I'm familiar with are Soros, Browne, C. Munger and of course B. Graham


 


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