In a recent Wall Street Journal article, columnist Jason Zweig discusses how guidelines from the late, legendary investment analyst Benjamin Graham can help guide today’s investors as they navigate through this period of market turbulence. Graham—who served as a mentor to Warren Buffett–highlighted the importance of discerning between investing and speculating, writes Zweig. He described investors as those focused on buying and holding “suitable securities at suitable prices,” while speculators would be more interested in… Read More
Although value stocks have lagged for a long time, an article by Wall Street Journal columnist Jason Zweig argues that the strategy’s champion, Benjamin Graham, still had the right idea. Zweig notes, “faster-growing, higher-priced stocks have outperformed by such huge margins that the long-run advantage of value stocks has withered away. Will that last? Probably not. Was Graham wrong? Almost certainly not.” The article points out three important tenets of Graham’s teachings: A stock “isn’t… Read More
By Justin J. Carbonneau (@jjcarbonneau) — Ben Graham’s tome The Intelligent Investor still sells over 100,000 copies a year as investors of all stripes look to learn the value-investing way. But as Warren Buffett once said, value investing is “is simple, but not easy”. The truth is, the vast majority of investors will never be able to become value investors as defined by Ben Graham for the reasons outlined below. This is not a critique,… Read More
By Justin J. Carbonneau (@jjcarbonneau) — If you Google “Ben Graham”, you will see that his name is synonymous with the value investing philosophy, and rightfully so. His book, Security Analysis, which was published in 1934 during the heart of the Great Depression, kicked off the era of classic value investing — that is, buying stocks that look cheap based on their assets or earnings. Graham’s investing philosophy was greatly influenced by the excesses seen… Read More
By Jack M. Forehand — One of the interesting things about investing is that the approaches that work the best in raising capital and obtaining clients are often the worst approaches in terms of producing the best long-term outcomes. Things like chasing strong recent performance, owning the stocks everyone wants to own, and the belief that successful investing needs to be complex all look great on paper, but none of them typically lead to optimal… Read More
By Jack Forehand — When we started following guru-based models, the term factor investing didn’t exist. We just wanted to find a way to outperform the market, and we realized that only a very small group of investors had successfully done that – and we certainly weren’t in that group. So we decided to follow investors who had long-term records of beating the market and whose strategies could be quantified. We read their books and… Read More
By John P. Reese — The celebrated author Mark Twain said, “It’s not what you don’t know that kills you, it’s what you know for sure that ain’t true.” Twain’s point is well taken, and a keen interpretation of the human condition. As a species, we are extremely accomplished at spinning tales and making meaning, whether based in logic or not, and formulating decisions based on those stories. A precarious tendency when it comes to… Read More
While some forms of stock picking can be risky, choosing stocks based on proven strategies and underlying fundamentals can “increase an investor’s odds of enjoying outperformance over time,” writes Validea CEO John Reese in a recent Forbes article. Reese explains that stock picking resides on a continuum comprised of varying approaches and combinations of approaches. He describes the philosophy of Benjamin Graham, the legendary investor and mentor to Warren Buffett who is widely viewed as… Read More
An essay by Vanguard founder John Bogle, published in a recent issue of the CFA Institute’s Financial Analysts Journal, offers insights and guidance concerning the need for balance between professional values and business values in the world of investing and finance. This is the third installment of a five-part series outlining highlights of the essay. Bogle uses the examples of Adam Smith and Benjamin Graham, trailblazers in professional investing, to illustrate the evolution of the… Read More
It’s the time of year when holiday party-goers lament their seasonal overindulgences and commit to “turning over a new leaf” on January 1st— promises to hit the gym every day, clear the pantry of junk food and turn off devices during family time are among the hopeful resolutions traded over hors d’oeuvres and prosecco. It’s also a time for reflection on the year that’s passed and setting in place a plan for the year ahead.… Read More
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