There seems to be someperverse human characteristic that likes to make easy things difficult. The academic world, if21/21anything, has actually backed away from the teaching of value investing over the last 30years. It’s likely to continue that way. Ships will sail around the world but the Flat EarthSociety will flourish. There will continue to be ... See more

You also have to have the knowledge to enable you to make a very general estimate aboutthe value of the underlying businesses. But you do not cut it close. That is what Ben Grahammeant by having a margin of safety. You don’t try and buy businesses worth $83 million for$80 million. You leave yourself an enormous margin. When you build a bridge, you ... See more

I would like to say one important thing about risk and reward. Sometimes risk and reward are correlated in a positive fashion. If someone were to say to me, “I have here a six-shooter andI have slipped one cartridge into it. Why don’t you just spin it and pull it once? If you survive, Iwill give you $1 million.” I would decline — perhaps stating th... See more

When the price of astock can be influenced by a “herd” on Wall Street with prices set at the margin by the most emotional person, or the greediest person, or the most depressed person, it is hard to argue that the market always prices rationally. In fact, market prices are frequently nonsensical.

these investors are, mentally, always buying thebusiness, not buying the stock.

One sidelight here: it is extraordinary to me that the idea of buying dollar bills for 40 centstakes immediately to people or it doesn’t take at all. It’s like an inoculation. If it doesn’t grab aperson right away, I find that you can talk to him for years and show him records, and itdoesn’t make any difference. I’ve never seen anyone who became a ... See more

I think the group that we have identified by a common intellectual home is worthy of study.Incidentally, despite all the academic studies of the influence of such variables as price,volume, seasonality, capitalization size, etc., upon stock performance, no interest has beenevidenced in studying the methods of this unusual concentration of value-ori... See more

The common intellectual theme of the investors from Graham-and-Doddsville is this: theysearch for discrepancies between the value of a business and the price of small pieces ofthat business in the market. The investors simply focus on two variables: price and value.