Lessons on investing from Warren Buffet's mentor Benjamin Graham

[JeffCreator]

I was reading this article today on whatinvestment.co.uk.

Some lessons I've taken from Benjamin Graham:

"If you can calculate a company's intrinsic value to a reasonable level of accuracy, you can then use the vagaries of the market to your advantage – waiting to buy shares until they fall below the intrinsic value – with the expectation that at some point the company will become overvalued. Buy low, sell high." (< Obviously )

Invest in companies whose liquid assets are greater than their market cap – effectively buying companies for nothing.


I think there is a lot we can learn from Graham- one thing is for sure.. You have to have some sort of natural instinct.

 

[AdamTheAnalyst]

I am a big fan of Graham, but you have to remember his theories apply to a diversified portfolio over a significant period of time, which isnt conducive to a lot of trading styles on this board, by following Grahams evaluation technique you're taught to loose site of when you will take profits and be comfortable knowing that their true value will be realised EVENTUALLY, even if that may take years or decades.

 

[Traderallen]

We do not have the money or the resources that Warren Buffett and Benjamin Graham have, therefore trying to learn their methodology on investing will do none of us any good. The average person does not have the time to wait years for an investment to pay off. Nor can the average person handle a 60% or more drawdown on their investments while waiting for them to come to fruition. Warren Buffett can afford to buy a company and set on the loser until it eventually turns around if it does. Therefore it's just my opinion clouding your head with books and webpages about their methods do more harm to a trader than good. As it teaches you rules that will never work for you. That is until your multimillionaire.

 

[NVP]

Great advice ....but investing isnt trading ......chalk and cheese.and I havnt got billions lying around to sit doing nothing..or indeed companies bending over backwards for my favour or money ....

N