I found this interesting, though about as technical as I'd want to get. It contrasts Graham and Dodd with other value investing possibilities. Starts on p. 5 of this PDF, which is the "Letter from the Chairman" section of Third Avenue Funds annual report. Also an Italy discussion starting on p. 43 of the PDF (39 of the report).
http://www.thirdave.com/ta/documents/reports/TAF 2011 Annual Report.pdf
(MCT = modern capital theory, OPMI = outside passive minority investors
(us), FF = fundimental finance, of which value investing is a part)
"In much of what MCT and G&D do, the goal is to
http://www.thirdave.com/ta/documents/reports/TAF 2011 Annual Report.pdf
(MCT = modern capital theory, OPMI = outside passive minority investors
(us), FF = fundimental finance, of which value investing is a part)
"In much of what MCT and G&D do, the goal is to
estimate the probable effect of certain items on near-term
market prices in OPMI markets. Thus, G&D emphasize
the importance of determining “true” earnings for a period.
In contrast, for FF, the possible or probable effect on OPMI
market prices is pretty much ignored in most, but not all,
cases. Rather, the goal in FF is to understand the underlying
values of a business as well as the business’ dynamics. Such
understanding requires a study not only of flows – whether
cash or earnings – but also, resource conversion
possibilities, access to capital markets and the quality and
motivations of management and control persons."market prices in OPMI markets. Thus, G&D emphasize
the importance of determining “true” earnings for a period.
In contrast, for FF, the possible or probable effect on OPMI
market prices is pretty much ignored in most, but not all,
cases. Rather, the goal in FF is to understand the underlying
values of a business as well as the business’ dynamics. Such
understanding requires a study not only of flows – whether
cash or earnings – but also, resource conversion
possibilities, access to capital markets and the quality and
