Value Investing : From Graham to Buffett and Beyond

Described by the New York Times as the "guru to Wall Street s gurus," Bruce Greenwald is a leading authority on value investing. His courses and seminars on the subject have drawn some of the savviest people in the investment world. Now, along with some colleagues, Greenwald reveals the fundamental principles that have made value investing one of the most consistently profitable investment techniques. In an investment world frequently blinded by excessive optimism, short term speculation, and other practices ranging from unsound to downright shady, value investing remains a reliable discipline even as it moves into a new century. Built on the works of Benjamin Graham, the father of security analysis, value investing is based on the premise that the underlying value of a financial security is measurable and stable, even though the market price fluctuates widely. The core of value investing is to buy securities when their market prices are significantly below their intrinsic values. Graham called the gap between price and value the "margin of safety." A large margin of safety both increases the potential return and reduces the risk of loss. In Value Investing, the authors enrich the discipline by exploring its history, explaining its underlying principles, and setting guidelines for its successful application. The book covers such indispensable issues as: Where to look for underpriced securities How to determine the intrinsic value of a stock Alternative methods for constructing a portfolio that control risk without restricting investment returns After discussing the basis of value investing, the book describes the proven techniques of some of the greatest value investors in history, including Warren Buffett, Walter Schloss, Mario Gabelli, and Michael Price. By adapting Graham s strategies to accommodate new investment climates, each has contributed a distinctive thread to make the discipline of value investing stronger and more flexible. Value Investing is a must for any serious investor wishing to gain a better understanding of the principles and practices behind this time tested approach. It will earn a place on the bookshelf next to Graham and Dodd s Security Analysis and Graham s The Intelligent Investor.