this seems fitting in this market. "What Ben Graham Taught Me About How To Become Wealthy" Do you always feel a bit nervous about investing in the stock market? Almost everyone does, but over time, no other investment will make you richer, provided you buy right. If you consistently buy right, and by that I mean low, you will always be able to count yourself among the most successful of investors. But how do you buy right? Let me share one of the greatest secrets I've ever learned. It's an insight from the late and great Ben Graham, the father of "value investing", and probably the creator of more stock-market fortunes than anyone in history. I believe this is the greatest secret old Ben ever revealed..... To take the mystery out of stock market investing, you should simply think of the market as a rich man named "Mr. Market". The key to becoming wealthy in the stock market is to understand that Mr. Market is an incurable manic-depressive. Some days, Mr. Market wakes up feeling deeply depressed. There is no consoling him. On these days, even though he owns magnificent companies, he'll walk into your office and throw his shares on your desk, willing to sell them to you for a pittance, just to get out of his positions. But then, a month or year later, he'll barge into your office again, this time feeling on top of the world. He'll be giddy with optimism, and offer you a king's ransom for the stocks he sold you for a song. Now, it makes no sense at all for you to try to figure out Mr. Market's volatile mood swings. He's nuts -- and nobody has ever consistently been able to predict when he'll wake up feeling depressed or manic, or when he'll snap out of his mood. So don't even try. All you need to know is the fair market value of the excellent companies you'd like to buy. Once you know the fair market value of what you want to buy, you can just sit there and wait for Mr. Market's inevitable mood swings. As sure as the sun rises, he'll give you repeated opportunities either to steal stocks from him for dimes on the dollar, or sell them back to him at a fool's price. And that's really all there is to it -- the safest, most scientific and consistent way you'll ever find to build your fortune in stocks. You'll never overpay. You'll be using the irrational emotions of others ("Mr. Market") to make you rich. When you buy, you'll buy at bargain-basement prices. When you sell, you'll collect top dollar. You will automatically be among the smartest and most successful of all investors.
thanks for the Excellent post. Regarding the FMV, it is better to be approximately right than be dead wrong!!
... for joking. indeed the description of the market as a maniac depressive is very nice and probably best one could say. nevertheless IMO the graham/dodd world was substantially different (they would argue: better) from ours. value at that time meant something quite different. for example dividends were a huge factor and companies not paying significant dividends were suspicious. the whole concept of growth was different. people invested for periodic payment in form of dividend yield, not exclusively for rising stock prices. having said that some concepts still have value. no doubt. peace
ben graham ? you gotta be kidding ! check out chapter 6 in victor niederhoffer's new book "practical speculation". enjoy!, surfer