Benjamin Graham was Warren Buffett’s teacher and mentor. He also ran an investment fund which specialized in uncovering undervalued stocks. One day in 1926, Graham was at his desk, reading through a government report on railroads, when he noticed a potentially valuable footnote. It referenced [...]
Navigating an Investment Minefield
Investors Raj Rajaratnam and Joel Greenblatt share a number of similarities. They’re almost exactly the same age. They both received business degrees from the University of Pennsylvania, and they both started well known hedge funds. But the differences may end there. During the 10 years that [...]
Chesterton’s Fence
In his 1929 book The Thing, British philosopher G.K. Chesterton introduced an idea that is now known as “Chesterton’s fence.” Here’s how he explained it. Imagine two people walking along a road when they discover a fence blocking the way for no apparent reason. As Chesterton tells it, the first [...]
What the Data Says
In the investment world, there’s no shortage of data. But how useful is it? To help get to an answer, let’s consider these four questions: When the economy is strong, is that good for stocks? The simple answer is yes. According to textbook finance, the value of any company should represent the [...]
New thinking
Among the quotes attributed to Mark Twain is this one: “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” This highlights one of the challenges of personal finance: that the data and the conclusions we rely on for decision-making can never [...]
