Benjamin Graham

  • 29 May
    Graham’s Take On Financial Advisors

    Graham’s Take On Financial Advisors

    I’ll continue summarizing Graham’s book The Intelligent Investor and today, we’ll touch on a very delicate subject: the investor and their advisors.

    As I offer stock market research services, you can put me into both the investor and advisors group. Let’s first see what Graham has to say and then discuss the current environment.



    Seeking Investment Advice

    As Graham is in favor of investing in businesses, he considers seeking investing advice naïve. More →

  • 22 May
    Here’s What Graham Might Have To Say About Index Funds Today

    Here’s What Graham Might Have To Say About Index Funds Today

    The main difference between index fund investing today and in Graham’s time are the fees, which in some cases were up to a 9% entry fee back then while now you can buy a market fund with a yearly asset management fee of 0.04%.

    Further, in his time, there weren’t any actual index funds which are the key investment vehicles at the moment, especially if an ETF.



    Graham On Mutual Funds

    Graham believes that the average investor does better by investing in funds rather than investing is stocks directly as funds promote the “good habits of savings and investing.” Those good habits are, unfortunately, not promoted by ETFs as the only purpose of them are to be tradable which is something you don’t want to do when you are a defensive investor and own a fund.  More →

  • 16 May
    This Is What You Need To Know To Be A Successful Investor

    This Is What You Need To Know To Be A Successful Investor

    Warren Buffett has stated that all you need to know for profitable long term investing is in chapters 8 and 20 of Benjamin Graham’s The Intelligent Investor.

    Chapter 8 is titled “The Investor and Market Fluctuations,” which is something we are all always intrigued by. The key is to prepare both financially and psychologically for market fluctuations.



    Market Fluctuations As A Guide To Investment Decisions – Timing Vs. Pricing

    Graham distinguishes between two ways of taking advantage of market fluctuations: you can time the market or you can price it. Timing assumes you predict where the stock market will go next, while pricing makes you look for stocks trading below their fair value.  More →

  • 11 May
    This Is Where Graham Says To Look For Investing Opportunities

    This Is Where Graham Says To Look For Investing Opportunities

    I’ll continue with my contemporary summary of Benjamin Graham’s book The Intelligent Investor as I believe that the combination of the everlasting wisdom in the book and a modern approach is all that an investor needs to reach great returns.

    Today’s discussion is about Chapter 7 – Portfolio Policy for the Enterprising Investor: The Positive Side.

    Today, we’ll turn from discussing how a defensive investor should invest to discussing how an enterprising investor should invest, one who devotes a fair amount of time in order to beat the market.




    More →

  • 26 Apr
    Here’s How A Defensive Investor Should Think About Stocks

    Here’s How A Defensive Investor Should Think About Stocks

    We all like common stocks, but in this stage of the economic cycle we should also be defensive. Therefore, it’s a perfect time to discuss Chapter 5 of Benjamin Graham’s book The Intelligent Investor – The Defensive Investor and Common Stocks.



    The topics we’ll discuss today are:

    • Four rules to follow when buying stocks.
    • Growth stocks.
    • Dollar cost averaging.
    • Investor’s personal situation.

    More →

  • 16 Apr
    Have Everything In Stocks Now? Here’s Why You’ll Want To Rethink That

    Have Everything In Stocks Now? Here’s Why You’ll Want To Rethink That

    • As crazy as it sounds, one shouldn’t have everything in stocks.
    • Perhaps the best counter option right now is short term bonds.
    • We’ll discuss Graham’s take and apply a contemporary perspective on it.



    Introduction

    Today, we’re going to continue our review of Benjamin Graham’s The Intelligent Investor with a discussion on the fourth chapter, General Portfolio Policy: The Defensive Investor.

    Graham clearly differentiates between aggressive and defensive investors where an aggressive investor spends a lot of time on research while a defensive one enjoys life. No matter whether you’re aggressive or defensive, this chapter is crucial for this environment as being defensive might be the most aggressive thing one can do. More →

  • 06 Apr
    Graham Has Some Words Of Wisdom For When The Market Crashes

    Graham Has Some Words Of Wisdom For When The Market Crashes

    Today, we’ll continue on with our series on The Intelligent Investor and applying Benjamin Graham’s everlasting knowledge to the current market in order to avoid doing stupid things while taking advantage of others’ stupid actions.

    Graham’s data goes up to 1971, so we’ll first look at his data and later discuss the insights that can be applied to the current market situation.



    The main points Graham emphasizes that we can learn much from are:

    • The varying relationships between stock prices and their earnings and dividends.
    • It’s important to understand the manner in which stocks have made their underlying advance through the MANY cycles of the past century (emphasis mine).
    • Look at successive ten-year averages of earnings, dividends, and stock prices.

    More →

  • 23 Mar
    Benjamin Graham Has Some Words Of Wisdom On Today’s Market

    Benjamin Graham Has Some Words Of Wisdom On Today’s Market

    Probably the best book out there for long term investors is Benjamin Graham’s book, The Intelligent investor. However, the most recent publication is from the 1970s, so I’ll go through the book in a series of articles in order to extract what is still relevant.

    Believe me, there’s still plenty of relevant material, especially in this market. This will allow us to compare the current market with essential value investing wisdom and perhaps improve our risk reward perspective on things.



    Let’s start with chapter 1, Investment Versus Speculation: Results to be expected by the Intelligent Investor. This chapter discusses the appropriate portfolio policy for the individual investor, an everlasting topic. More →

  • 11 Aug
    Is Value Investing Dead?

    Is Value Investing Dead?

    • The last 10 years have been terrible for value investors as it has seemed like fundamentals don’t matter at all anymore.
    • There are limited options to be a value investor as the Russell 1000 value index has a price to book ratio above 2.
    • I’ll discuss three options for what a value investor can do and the historical results of such approaches.

    Introduction

    If you’re a value investor or have been invested in a value fund, you probably aren’t the happiest investor in the world right now. More →

  • 20 Jul
    Sven’s List Of The Five Books Every Investor & Trader Should Read

    Sven’s List Of The Five Books Every Investor & Trader Should Read

    I love books on investing, and find them to be the best possible investment. For just a few bucks, you can get the synthesized knowledge of the most successful investors. On top of that, many also discuss their mistakes, which are an even more valuable source of learning.

    So with that, today I’ll the list the books on my list that I think every investor or trader should read alongside a short commentary. More →

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