Finally, I have mustered motivation to go through this book. I just received the sixth edition. While I have gone through some of the reviews at Amazon.com, I would like to get advice from folks on this forum. Specifically, should I go from start to end or are there some other better sequence to go through this.
Its a good read, i read it from beginning to end. Sometimes captivating, monotonous at others. I like the concept of value investing, Buffets advocates it but I think Buffet’s style is more like vulture investing. I am not sure about the difference b/w the two.
Buffet rejected much of Graham’s teaching. Graham wouldn’t have bought Coke.
razedge Wrote: ------------------------------------------------------- > Its a good read, i read it from beginning to end. > Sometimes captivating, monotonous at others. I > like the concept of value investing, Buffets > advocates it but I think Buffet’s style is more > like vulture investing. I am not sure about the > difference b/w the two. Very sharp vulture on top of all the fundamental analysis. If you read “When Genius Failed”, you can see what kind of merciless bargainer Buffet is. Of course, most of his letter to shareholders has some story of bargain buys. Of course, mercy has no meaning in investing. Buffet’s mercy would be the shareholder’s loss.
In every interview Buffets swears by Graham’s books and his teachings. Coke was a safe bet, Buffet saw it coming. buyicide Wrote: ------------------------------------------------------- > Buffet rejected much of Graham’s teaching. Graham > wouldn’t have bought Coke.
razedge, how have you used some of the specific teachings of Security Analysis in real life? Of course, most of investors doing fundamental analysis would look at the financial statements, but what else does Security Analysis taught you on top of the basic fundamental analysis.
buddham, this a great question, and remember, there are supplemental chapters on the CD included with your book that didn’t make it to the sixth edition (they would have made the book too long with the new commentary). I think the best way to approach it is similar to how a lot of people study for CFA: I would highlight important points and actually take notes. This time around, I plan on really paying attention and would be happy to share any notes I’ve made through Google Documents - although taking your own notes is probably best for retention. Here’s a summary made by my home dawg, Saj Karsan: http://www.barelkarsan.com/?cx=partner-pub-6980042980448118%3A3tfuevtrowi&cof=FORID%3A10&ie=ISO-8859-1&q=security+analysis&sa=Search#1176 Cheers and Good Luck.
buddham Wrote: ------------------------------------------------------- > razedge, how have you used some of the specific > teachings of Security Analysis in real life? Of > course, most of investors doing fundamental > analysis would look at the financial statements, > but what else does Security Analysis taught you on > top of the basic fundamental analysis. It teaches you to be objective, which intertwines with the psychology of dealing with money. In terms of capital allocation, the book preaches that we shouldn’t speculate; rather, looking at inherent value of a company today and weighing against a ‘margin of safety’ since we will be inevitably inaccurate in assumptions, creates the framework for being patient and letting the market present opportunities to you.
Is the breadth of the margin of safety calculated? Or does Warren just use his gut feeling?
razedge Wrote: ------------------------------------------------------- > In every interview Buffets swears by Graham’s > books and his teachings. Coke was a safe bet, > Buffet saw it coming. > > > buyicide Wrote: > -------------------------------------------------- > ----- > > Buffet rejected much of Graham’s teaching. > Graham > > wouldn’t have bought Coke. I think the main difference between Graham and Buffet was that Graham thought the best thing to do was to diversify. Buffet thought it was best to target a company or a few companies and receive returns from them.
Also, Graham being a huge nerd, didn’t try to put much bearing on company management because he wanted to create a methodology that the general investor could apply. He liked the idea of measuring the balance sheet against the stock price, but in the case of Coca-Cola, as mentioned by buyicide, the company was all Goodwill (due to brand recognition). It would have probably been conservatively omitted since it’s a very subjective line item.
I’m actually going through pieces of it again. As TheAliMan already stated - it’s considered the bible for its emphasis on the investment process (and the proper mindset for carrying out an investment operation) as opposed to specific tools. Graham taught Buffett at CBS back in the 30’s and later employed Buffett as an analyst at the Graham Newman Corp. Early Buffett resembles much of Graham’s style if you take the time to read through the original Buffett Partnership Letters. Philip Fisher’s Common Stocks and Uncommon Profits (if you want to tackle another classic), as well as Charlie Munger had a big influence on shaping the investor he is today. And I think reject is the wrong word. Evolved is more appropriate.
What is the name of this book? Can someone please post a link. Thanks in advance.
What is the name of this book? Can someone please post a link. Thanks in advance.
ValueAddict Wrote: ------------------------------------------------------- > > And I think reject is the wrong word. Evolved is > more appropriate. I’m not going to argue value investing with a guy named valueaddict, but this is what I took from “The Warren Buffet Way:” Graham preached cheapness/value above all. Buffet started out like that, but eventually (rejected or evolved beyond) that approach. Rather than insisting on buying a company at the cheapest price, he focused on buying a great company at a good price. I’m going to paraphrase/quote Buffet: “It is far better to buy a great company at a fair price than a good company at a great price.” I believe that represents a serious departure from Graham.
buyicide Wrote: ------------------------------------------------------- > ValueAddict Wrote: > -------------------------------------------------- > ----- > > > And I think reject is the wrong word. Evolved > is > > more appropriate. > > > I’m not going to argue value investing with a guy > named valueaddict, but this is what I took from > “The Warren Buffet Way:” Graham preached > cheapness/value above all. Buffet started out > like that, but eventually (rejected or evolved > beyond) that approach. Rather than insisting on > buying a company at the cheapest price, he focused > on buying a great company at a good price. > > I’m going to paraphrase/quote Buffet: “It is far > better to buy a great company at a fair price than > a good company at a great price.” > > I believe that represents a serious departure from > Graham. Agreed.
Rasec Wrote: ------------------------------------------------------- > What is the name of this book? Can someone please > post a link. > > Thanks in advance. Here you go: http://www.amazon.com/Holy-Bible-King-James-Version/dp/1565633253/ref=sr_1_21?ie=UTF8&s=books&qid=1249696532&sr=1-21
buyicide Wrote: ------------------------------------------------------- > ValueAddict Wrote: > -------------------------------------------------- > ----- > > > And I think reject is the wrong word. Evolved > is > > more appropriate. > > > I’m not going to argue value investing with a guy > named valueaddict, but this is what I took from > “The Warren Buffet Way:” Graham preached > cheapness/value above all. Buffet started out > like that, but eventually (rejected or evolved > beyond) that approach. Rather than insisting on > buying a company at the cheapest price, he focused > on buying a great company at a good price. > > I’m going to paraphrase/quote Buffet: “It is far > better to buy a great company at a fair price than > a good company at a great price.” > > I believe that represents a serious departure from > Graham. Value investing is a philosophy not just another investing style. Real value investors never depart from what Graham taught them. I guess it’s hard for you to understand.
bernie_m Wrote: ------------------------------------------------------- > Rasec Wrote: > -------------------------------------------------- > ----- > > What is the name of this book? Can someone > please > > post a link. > > > > Thanks in advance. > > Here you go: > > http://www.amazon.com/Holy-Bible-King-James-Versio > n/dp/1565633253/ref=sr_1_21?ie=UTF8&s=books&qid=12 > 49696532&sr=1-21 Joker!
Rasec Wrote: ------------------------------------------------------- > What is the name of this book? Can someone please > post a link. > > Thanks in advance. http://www.amazon.com/Security-Analysis-Foreword-Buffett-Editions/dp/0071592539/ref=pd_cp_b_0