The Simple Concept of Intrinsic Value

Posted on 21 CommentsPosted in Ben Graham, Investment Philosophy, Warren Buffett

“The newer approach to security analysis attempts to value a common stock independently of its market price. If the value found is substantially above or below the current price, the analyst concludes that the issue should be bought or disposed of. This independent value has a variety of names, the most familiar of which is “intrinsic value”. – Ben Graham, Security Analysis (1951 Edition) Graham went on to say this about the definition of intrinsic value: “A general definition of intrinsic […]

Buffett’s Early Investments

Posted on 19 CommentsPosted in Ben Graham, Case Studies, Investment Philosophy, Superinvestors, Warren Buffett

“The highest rates of return I’ve ever achieved were in the 1950’s. I killed the Dow. You ought to see the numbers. But I was investing peanuts then. It’s a huge structural advantage not to have a lot of money. I think I could make you 50% a year on $1 million. No, I know I could. I guarantee that.” – Warren Buffett, 1999 Most Buffett fans have seen that quote. I recently had a few questions and comments that […]

Net-Nets: A Riddle Wrapped in Mystery Inside a Cigar Butt

Posted on 11 CommentsPosted in Ben Graham, Case Studies, Investment Philosophy, Superinvestors, Warren Buffett

I received a couple questions/comments from readers lately regarding Buffett and some previous comments I made on strategy before and after the Berkshire annual meeting. I always enjoy interacting with readers. The vast majority of my days are spent researching new investment ideas, so I can’t always respond to everything, but please feel free to email me questions/comments to john@sabercapitalmgt.com. I read all my emails even if I don’t always have time to respond. When possible, I’ll respond individually, or […]

A Lesser Known Gem by Ben Graham

Posted on 16 CommentsPosted in Ben Graham, Books, Education, How to Improve Results, Investment Philosophy, Superinvestors

Ben Graham is known largely for writing two of the most cited books in the field of value investing. Of course, in addition to being an outstanding writer and educator, he was a proficient practitioner of the investment field as well—a dual distinction that is extremely rare. In other words, he didn’t just preach, he practiced as well. And he did both at a very high level. His investment record was excellent—he averaged gross returns around 20% per year in […]

Thoughts on Finding Value When Stocks Are Making New Highs

Posted on 3 CommentsPosted in Ben Graham, Investment Philosophy, Portfolio Management, Superinvestors, Think Differently, Walter Schloss

I’ve been traveling for the last two weeks, and thus the reason for the lack of posts. But I’ve been working and reading as usual, and actually have been active in making a few investments, despite the overall market climbing to new highs. I’ve mentioned this before, but it’s worth saying again… I put almost no emphasis on what the overall market is doing and where the indices are. I simply look for undervalued stocks. But regardless of the methods […]

Case Study-The Story of GEICO, Graham, and Buffett

Posted on 8 CommentsPosted in Ben Graham, Case Studies, Investment Philosophy, Superinvestors, Warren Buffett

Geico is a company that is owned by Warren Buffett’s Berkshire Hathaway. It’s an incredibly interesting company to study. I recently read an outstanding presentation on the company by David Rolfe of Wedgewood Partners. This post is my take… a short summary of the story of GEICO from the notes of that presentation. I recommend studying the presentation for more details on the company itself-I learned a lot by doing so. It’s a great case study. Now… for the story, […]

Invert, Always Invert: More on Thinking Differently

Posted on 1 CommentPosted in Ben Graham, How to Improve Results, Investment Philosophy, Investment Quotes, Portfolio Management, Superinvestors, Think Differently

“Invert, Always Invert.” -Carl Gustav Jacob Jacobi, 19th century mathematician, using the phrase to describe how he thought many problems in math could be solved by looking at the inverse. Charlie Munger often uses this same quote to express how investors can likewise benefit by looking at the inverse, or opposite, of what others are looking at.  Yesterday I wrote a post on Buffett and how he achieved 50% returns, and “guaranteed” that he could replicate those returns on a […]

Some Thoughts on My Investment Approach

Posted on 4 CommentsPosted in Ben Graham, Investment Philosophy, Joel Greenblatt, Superinvestors, Walter Schloss, Warren Buffett

I’ve been having numerous email conversations with readers about my investment philosophy and overall approach to investing. To understand my investment philosophy, you have to first understand the basic investment principles from the four investors who I’ve learned the most from: Ben Graham, Walter Schloss, Joel Greenblatt, and Warren Buffett. My investment approach is a confluence of ideas that primarily stem from those four investors. Graham is the foundation. Schloss and Greenblatt add important ideas and strategies to Graham’s foundation. Buffett […]

Value vs. Growth Investing-Which Method is Best?

Posted on 2 CommentsPosted in Ben Graham, General Thoughts, Investment Philosophy, Superinvestors, Walter Schloss, Warren Buffett

As an investor who studies in great detail the strategies and investment philosophies of the great value investors, I have always been intrigued by the debate of value vs. growth. I just wrote this post on qualitative vs. quantitative analysis. The discussion between growth and value is similar: the best growth investors are good business analysts… they have to be. It’s easy to find a company that’s growing, but the hard part is determining if that company will continue to […]

Ben Graham’s 4 Rules for the Defensive Investor

Posted on 2 CommentsPosted in Ben Graham, Investment Philosophy, Superinvestors

“All knowledge is cumulative.” -Mohnish Pabrai The other day I was driving around listening to Ben Graham’s The Intelligent Investor “book on CD” that I received as a gift last year. I first read The Intelligent Investor 7 years ago, and it changed the way I think about investing, as it does for many others who read it for the first time. I’ve read the book twice, but I’ve listened to the CD about six or seven times since getting it last fall. There […]