Security Analysis

[CLJACKSON04]

Isn't that kind of like becoming proficient at sword fighting in todays battlefield? The Intelligent Investor was not very useful...definitely outdated.

[joshuat]

Yup, just like Buffett, Schloss, Ruane, Berkowitz, Munger, Fisher, et. al. All outdated dinosaurs making more money than anyone else playing the game today.

[Xyvern]

Originally Posted by CLJACKSON04

Isn't that kind of like becoming proficient at sword fighting in todays battlefield? The Intelligent Investor was not very useful...definitely outdated.

Are you talking about the book "Intelligent Investor" ? If you do, you posted your comment on the wrong thread.

[bovverd]

Originally Posted by CLJACKSON04

Isn't that kind of like becoming proficient at sword fighting in todays battlefield? The Intelligent Investor was not very useful...definitely outdated.

Maybe you can explain exactly what part of buying something for 50% less than its intrinsic value and then waiting for the market to re-price it accurately does not work in todays markets considering theres enough evidence facts and examples out there proving it does..

[CLJACKSON04]

fuzzy logic there buddy. It's analogous to studying early PC software to be the next Bill Gates.
What's of use has already been absorbed into current value investing literature.
I'm not saying that The Intelligent Investor won't make Buffet a billionaire, but rather that it's very unlikely to make you one.
It's premise is already established, it's being able to execute it that is difficult.

Originally Posted by joshuat

Yup, just like Buffett, Schloss, Ruane, Berkowitz, Munger, Fisher, et. al. All outdated dinosaurs making more money than anyone else playing the game today.

[npg]

Originally Posted by CLJACKSON04

Isn't that kind of like becoming proficient at sword fighting in todays battlefield? The Intelligent Investor was not very useful...definitely outdated.

A very good question indeed...

Asking such questions makes for a very useful mind set. Indeed, one could argue both points that the book is either outdated or highly relevant. Aiming at thinking independently free of established dogmas is a very useful intellectual trait when it comes to investing. Even when the dogma is something as preposterous as the misguidedly labelled 'value investing'.

What is certain is that the book nowadays does not produce anything fundamentally new (it has been quoted too often, its principles often parroted in many financial writings). But are its principles outdated as sword fighting in today's battlefield? On that point I would argue no. Stocks still compete with bonds as far as rate of return is concerned. A margin of safety is always necessary when estimating anything.

Maybe the question here should be: Is it still necessary to read this book?

There one could argue: probably not. The principles outlined therein are already absorbed into mainstream investment literature.

[joshuat]

Originally Posted by CLJACKSON04

fuzzy logic there buddy. It's analogous to studying early PC software to be the next Bill Gates.
What's of use has already been absorbed into current value investing literature.
I'm not saying that The Intelligent Investor won't make Buffet a billionaire, but rather that it's very unlikely to make you one.
It's premise is already established, it's being able to execute it that is difficult.

I absolutely disagree. Intelligent Investor is the intellectual foundation of value investing. Early pc software is not the intellectual foundation of current software practices. Fuzzy logic indeed.

With that nit out of the way, I agree that there are current publications that cover value investing nicely. Buffett himself has moved on from pure Grahamian investing; he has notably been influenced by Fisher and Munger, among others.

I agree and disagree as far as your comment about the hard to apply. This board is filled with people looking for easy solutions - plug a ticker symbol into a spreadsheet, wait for the "3 greens" to buy and sell. I come from the Munger mold - read, read, read. As Graham's writings are the intellectual foundation of what we are now doing, I think it is not just an interesting read, but an absolutely indispensible read. I don't aim to invest like Buffett of the 2000s because I don't have what Buffett has - 60B cash. I do aim to invest like the Buffet of the 60s - someone who can move nimbly. The absolute best way to do that, in my opinion, is to travel the intellectual journey that Buffett himself traveled - read Graham, then read Fisher, then read the Buffett partnership letters, then read some Munger, etc., backed up with the reading of thousands of company reports.

Is any of that easy? No, hence my agreement with you. Is it possible, and even necessary if you want to beat the market (as a value investor)? Yes to both. And that is why we are here on this board, after all. We can match the market by buying a few index funds, read nothing, and sleep easy at night. We are reaching for something more.

Finally, the classic text has been amply annotated to bring it up to date to current market conditions. We aren't likely to find many net-net companies, for example (though they do come around occasionally, they aren't going to be our bread and butter). I can think of no better training for a financial mind than to work through the book, and think about what applies, and what has changed in the market since it has been written.

This book sits on the bookshelf of every serious value investor I have ever heard of. It is widely recommended by the same. "By far the best book on investing ever written." - Warren E. Buffett. Without rudeness, let me suggest that people are better off taking Warren's advise than yours mine.

Now, if you have recommendations for contemporary books with the intellectual rigor and content of The Intelligent Investor, please share, because I am always looking to expand my horizons.

[bovverd]

Originally Posted by joshuat

I absolutely disagree. Intelligent Investor is the intellectual foundation of value investing. Early pc software is not the intellectual foundation of current software practices. Fuzzy logic indeed.

With that nit out of the way, I agree that there are current publications that cover value investing nicely. Buffett himself has moved on from pure Grahamian investing; he has notably been influenced by Fisher and Munger, among others.

I agree and disagree as far as your comment about the hard to apply. This board is filled with people looking for easy solutions - plug a ticker symbol into a spreadsheet, wait for the "3 greens" to buy and sell. I come from the Munger mold - read, read, read. As Graham's writings are the intellectual foundation of what we are now doing, I think it is not just an interesting read, but an absolutely indispensible read. I don't aim to invest like Buffett of the 2000s because I don't have what Buffett has - 60B cash. I do aim to invest like the Buffet of the 60s - someone who can move nimbly. The absolute best way to do that, in my opinion, is to travel the intellectual journey that Buffett himself traveled - read Graham, then read Fisher, then read the Buffett partnership letters, then read some Munger, etc., backed up with the reading of thousands of company reports.

Is any of that easy? No, hence my agreement with you. Is it possible, and even necessary if you want to beat the market (as a value investor)? Yes to both. And that is why we are here on this board, after all. We can match the market by buying a few index funds, read nothing, and sleep easy at night. We are reaching for something more.

Finally, the classic text has been amply annotated to bring it up to date to current market conditions. We aren't likely to find many net-net companies, for example (though they do come around occasionally, they aren't going to be our bread and butter). I can think of no better training for a financial mind than to work through the book, and think about what applies, and what has changed in the market since it has been written.

This book sits on the bookshelf of every serious value investor I have ever heard of. It is widely recommended by the same. "By far the best book on investing ever written." - Warren E. Buffett. Without rudeness, let me suggest that people are better off taking Warren's advise than yours mine.

Now, if you have recommendations for contemporary books with the intellectual rigor and content of The Intelligent Investor, please share, because I am always looking to expand my horizons.

The lack of net/nets is more to do with being at the very top of one of the longest running bull market cycles in modern history where we have very very average companies selling for 30 and 40 times earnings. Very few bargains will be available in these conditions regardless of a persons investment strategy.

Back to the original question: Its impossible to state that any book is a pointless read without being able to determine how much a person will learn by reading it. On the basis that each individuals personal experience with a book will be entirely different to the next person, based upon their specific levels of knowledge and intelligence, it cannot be said that a book is not worth reading.

[rei46]

How is this book reading guys? I was thinking about getting it. But, I'm unsure how relevent it is to current accounting statements today? Sounds like it may be too heavy for me from your posts.

Anyone suggest a book that can be applied to current accounting reports? I suck at math so prefer one that is written in layman terms, rather than an accounting textbook? Thanks!

[bovverd]

Originally Posted by rei46

How is this book reading guys? I was thinking about getting it. But, I'm unsure how relevent it is to current accounting statements today? Sounds like it may be too heavy for me from your posts.

Anyone suggest a book that can be applied to current accounting reports? I suck at math so prefer one that is written in layman terms, rather than an accounting textbook? Thanks!

Intelligent Investor is brilliant and will also give you the answer to why those Asset candidates will never meet Rule 1 valuations!