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Old 12-02-2007, 02:16 PM   #41
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Originally Posted by twaddle View Post
Well, there's the academic definition (basically low P/B, with high yield considered a so-so proxy),
From my POV, this doesn't define value; rather it suggests junk. But I understand what you are saying. Historically the Ben Graham definition was first. It followed on John Burr Williams, and was intended to structure investment approach and improve performance. The "academic" definition which IMO should be read as the marketing definition was intended to create ancillary layers of advisory fee streams in the much more marketing intensive modern environment.

I am agnostic as to whether there is enduring value in academic finance beyond option theory and things of that sort, but I am sure that old time value investing will make money over the cycle, and not get you killed. And I have read J. Finance, etc. etc. off and on for years, so I am not unacquainted with the academic ideas.

I also believe that there are flaws in benchmarking performace to some index or another. For example, say you are a mountaineer planning a long dangerous ascent. Basically you can go light, which means faster- but at a risk should adversity strike while you are on the mountain. Or you can go in slower, but more covered fashion.

If the weather stays nice, the guys who go light reach the peak quicker. But should a storm arise, they may die. Should the guys who carried more safety gear be judged against the clear-weather ascent of the Go-Lightlies?

IMO, no.

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Old 12-03-2007, 08:30 AM   #42
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page 563, appendix: The New Speculation in Common Stocks first read 1973 in the 4th ed of Ben Graham's The Intelligent Investor.

In 1989 the light bulb sort of came on (so I'm a block head) - started buying and dollar cost averaging DRIP plan stocks from the middle of Moody's Handbook of Dividend Achievers(Mergent later bought this out).

erratic 8% - via 3-5% div.'s and spin offs, cash buyouts, mergers with cash kickers etc. 1989 - 2007. Down to 33 from a peak of over 50 DRIP's(two file cabinets). hormones like drugs are hard to kick. 40% of income some early years of ER.

1957 Speech is often overlooked when talking about Ben - skip all that fancy value/margin of safety crap - buy some middle way businesses that you know what they do and keep them. That way you avoid the magic, mystery and manipulation - boring but it works.

Yawn - so ok - maybe the Pats do have a good football team.

heh heh heh -
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Old 12-03-2007, 08:39 AM   #43
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Good? GOOD?!?
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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Old 12-03-2007, 09:42 AM   #44
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Originally Posted by haha View Post
Do you live in the Palace at Versailles?

No, just an apartment in the city, it's a good spot popular with tourists.
And everything's close by so I don't have a car and I've always lived below my means.
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