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.