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I've read the books you listed, and whole heartedly agree with the Graham/Dodd/Buffet crowds with respect to fundamental analysis. However, I don't think this p
by cloudkj 17y ago
I've read the books you listed, and whole heartedly agree with the Graham/Dodd/Buffet crowds with respect to fundamental analysis. However, I don't think this philosophy is mutually exclusive with the Efficient Market Hypothesis. I personally believe in a loose form of EMH, since it actually makes intuitive sense to me. A loose form doesn't mean that investors are SOL in terms of finding good investments; they just need to work much harder (doing all the things you outlined: reading and learning, constantly) to build a high margin of safety and refrain from speculating on high risk securities.
To add to your insightful comments, I'd also recommend subscribing to The Economist to get excellent worldly news about business, finance, and economics.
- jakarta 17y agoYeah, I agree with the loose interpretation of EMH. The market has to be somewhat efficient in order to eventually realize a security's true value. Personally, my favorite stuff is where there are clear inefficiencies. Investing in orphan spinoffs is an example-- a company is spun off from its parent but is too small to be included in the S&P 500 or some key index, where its parent exists. Since it wont be part of the major indices, fund managers are forced to sell, creating the kind of inefficiency that an investor can profit from.