Ben Graham

The Simple Concept of Intrinsic Value

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“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 […]

Ben Graham

Buffett’s Early Investments

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“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 […]

Ben Graham

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

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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 […]

Ben Graham

A Lesser Known Gem by Ben Graham

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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 […]

Case Studies

A Few Key Links From 2013

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It’s the last day of the year, and everywhere you look are various “Top 10 lists”, “2013 Best Posts”, etc… Despite the title, this post is not such a list… I thought I would re-post some links to just a few things that I have read recently that I found interesting. It is more coincidence that I’m posting this on the last day of the year, and this is far from a comprehensive list of valuable things I’ve read this […]

General Thoughts

Can George Soros’ Methods Be Replicated?

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I received this comment on one of my recent posts. The George Soros question got me thinking about how interesting the different philosophies are. Soros had an incredible career, but is it possible to replicate his general strategy? Here is the basic comment from the reader: Your posts have given me a great deal of information.  What is your opinion on George Soros’ theory of reflexivity? I was reading Seth Klarman’s Margin of Safety, and it mentioned how in rare […]

General Thoughts

Some Thoughts on Joel Greenblatt’s Magic Formula and its YTD Results

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“Value investing is simply figuring out what something is worth and paying a lot less for it” – Joel Greenblatt I often describe my investment philosophy as a synthesis of ideas from Ben Graham, Walter Schloss, Warren Buffett, and Joel Greenblatt. At the core of my strategy is Graham and Schloss’ quantitative methods for valuing stocks. It’s far more difficult to make mistakes when you simply make obvious, simple decisions based on valuation. In each investment, I want to ensure […]

Investment Philosophy

Intelligent Investor: Consistent Base Hits & The Occasional Home Run

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This is one of my favorite passages from The Intelligent Investor. It’s a passage that I immediately gravitated to when I first read it, and it does a nice job of summarizing how I think about my investment approach: methodically making many different investment decisions that as a group end up yielding excellent results over time. To use a baseball metaphor… I like getting on base as often as possible: hitting singles. I’m always prepared for the home run ball, […]

Ben Graham

Thoughts on Finding Value When Stocks Are Making New Highs

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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 […]

Ben Graham

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

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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, […]