I discovered some great lectures from Benjamin Graham when he was a professor at Columbia University. There are a total of ten lectures which are from Graham's class in 1946. I summarized the main points of each and something new I learned from it...
This is great information that is not in The Intelligent Investor nor Security Analysis. I will be going through all ten lectures and releasing them over the next few days.
The Rediscovered Benjamin Graham Lectures – 1
In part one of Benjamin Graham’s lectures he aims to deal with the current problems facing security analysis within the financial world. While originally written back in the 1940’s, the themes and the information which he covers is still useful in today’s world. The central theme of the first lecture is the relationship between the security analyst and the relationship that he has with the stock market. Graham does an excellent job of providing the audience with explanation about the stock market. But while you might need some prior knowledge in order to help you understand exactly what he is speaking of, he is also able to take an otherwise difficult subject and explain it thoroughly enough so that even the rookie investor may understand his meaning.
While speaking on the idea of continuity, Graham is able to fully explain the central ideas of how the market is cyclical by only demonstrating a few different points. He also goes in to some of the strategies of how you may wait for otherwise “good” stocks to drop to extremely low levels for a great buy (if you can stomach buying a stock at a level lower than it had been for multiple cycles, anyways). Graham also touches on the specific idea of selective investing, in which the real purpose is not to find the best businesses with the best prospects because it is too easy. The central idea is to actually apply the security analysis techniques which prove which companies are undervalued according to mathematical and financial formulas.
Graham wrote that new stock offerings were being sold at many times of their earnings. He argues that these new stocks were nowhere near the more established and stable stocks currently on the market, but for whatever reason the individuals who were eating up these shares continued to purchase them at extraordinary prices. He further goes on to explain that while you cannot get too far into business or industry level analysis for a security analysis based problem, it is still something that needs to be considered for even the most open and shut case. One of the examples that he listed portrayed a security analyst selling a stock with limited upside by industry analysis definitions at a rate of between six and seven times earnings per share.
It was also a very interesting point to learn or recall, that a company (Curtiss-Wright) had been significantly undervalued at the time because of only the current numbers on account. Graham then suggests that by looking at the actual earnings, a method he arrives at by subtracting balance sheet value shown at the beginning from that at the end of the period, and then adding back the dividends. At that point you will be left with the real earned value over that time period.
It is very interesting to see the way that Graham is able to take some very basic important and often overlooked concepts and clarify them for novice and experienced investors alike. Obviously the security analyst needs to fully pay attention to his job, and it appears that at the time many stocks were completely valued incorrectly.
Link to full article here:
http://www.wiley.com/legacy/products/subject/finance/bgraham/benlec1.html
http://www.valuewalk.com/
This is great information that is not in The Intelligent Investor nor Security Analysis. I will be going through all ten lectures and releasing them over the next few days.
The Rediscovered Benjamin Graham Lectures – 1
In part one of Benjamin Graham’s lectures he aims to deal with the current problems facing security analysis within the financial world. While originally written back in the 1940’s, the themes and the information which he covers is still useful in today’s world. The central theme of the first lecture is the relationship between the security analyst and the relationship that he has with the stock market. Graham does an excellent job of providing the audience with explanation about the stock market. But while you might need some prior knowledge in order to help you understand exactly what he is speaking of, he is also able to take an otherwise difficult subject and explain it thoroughly enough so that even the rookie investor may understand his meaning.
While speaking on the idea of continuity, Graham is able to fully explain the central ideas of how the market is cyclical by only demonstrating a few different points. He also goes in to some of the strategies of how you may wait for otherwise “good” stocks to drop to extremely low levels for a great buy (if you can stomach buying a stock at a level lower than it had been for multiple cycles, anyways). Graham also touches on the specific idea of selective investing, in which the real purpose is not to find the best businesses with the best prospects because it is too easy. The central idea is to actually apply the security analysis techniques which prove which companies are undervalued according to mathematical and financial formulas.
Graham wrote that new stock offerings were being sold at many times of their earnings. He argues that these new stocks were nowhere near the more established and stable stocks currently on the market, but for whatever reason the individuals who were eating up these shares continued to purchase them at extraordinary prices. He further goes on to explain that while you cannot get too far into business or industry level analysis for a security analysis based problem, it is still something that needs to be considered for even the most open and shut case. One of the examples that he listed portrayed a security analyst selling a stock with limited upside by industry analysis definitions at a rate of between six and seven times earnings per share.
It was also a very interesting point to learn or recall, that a company (Curtiss-Wright) had been significantly undervalued at the time because of only the current numbers on account. Graham then suggests that by looking at the actual earnings, a method he arrives at by subtracting balance sheet value shown at the beginning from that at the end of the period, and then adding back the dividends. At that point you will be left with the real earned value over that time period.
It is very interesting to see the way that Graham is able to take some very basic important and often overlooked concepts and clarify them for novice and experienced investors alike. Obviously the security analyst needs to fully pay attention to his job, and it appears that at the time many stocks were completely valued incorrectly.
Link to full article here:
http://www.wiley.com/legacy/products/subject/finance/bgraham/benlec1.html
http://www.valuewalk.com/
