As promised recently we are updating/cleaning the investor resource pages on a regular basis. This week we’ve updated the resource pages of David Dreman and Benjamin Graham.
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Below is a partial excerpt from the two new pages followed by link to the full page, which can also be found under Value Investors tab above.
David Dreman
Dreman’s studies of the market led him to discard conventional wisdom, ignore the attraction of glamour stocks and develop his own brand of contrarian value investing. This meant hunting for shares that nobody else was interested in and deliberately acting against the prevailing market fashion.
He wants to find unloved and overlooked stocks in beaten down sectors at knock-down prices. He judged that it was precisely these sort of shares that will bounce back when the mood of the market eventually changes.
Benjamin Graham
Benjamin Graham favored an investing approach with a margin of safety. This approach calls for buying a stock below its value. Since it is impossible to precisely value a stock, a margin of safety provides room for human error. In addition, if the company’s conditions deteriorate, the margin of safety provides a cushion to the investor.
The most classic example of a Benjamin Graham stock is called a net net. This is a case where Ben Graham said that the company is worth literally “more dead than alive”. A net net would be a case where the cash and current assets of the company would be equal to more than the company is currently trading at. If the company were to liquidate today an investor would receive more money than the stock is currently trading at. However, to provide a margin of safety Ben Graham would buy stocks selling at 2/3 of their net-net value. A basket of these stocks have outperformed the indexes by wide margins over several different time periods.
https://www.valuewalk.com/benjamin-graham/
