investment, put simply, means buying a stock, or indeed a business, at less than its
intrinsic value. This method of investment was pioneered by Benjamin
Graham, the father of securities analysis, and has been modified and enhanced by such
legendary investors as Warren Buffett and Peter Lynch.
Graham always took the position that value investment was the only real form of
investment; anything else was speculation.
There are other investment theories such as modern portfolio theory (mixing unrelated
stocks in a portfolio gives less volatility than the average volatility of the stocks);
the efficient market theory, which assumes that the market price of a share accurately
reflects the information available about that particular investment; and the random walk
This section will look at the value investment theories of Graham and others, and the
investment approach of Buffett and Munger. It will also discuss, in time, other investment
We look at several companies to determine, for our own purposes, whether they are worth
further analysis. Coca-cola Boeing - new
Benjamin Graham's Investment Philosophy - A
summary of the lessons given by the man, among whose disciples include some of our most
successful investors. Mr Market - Benjamin Grahams parable that explains how
investors should rely on their own judgment, after careful analysis, and ignore the
vagaries of the stock market. The Margin of Safety - Considered by many successful
investors as the key to investment gains. Investors should only buy stock at intrinsic
value but with an inbuilt safety margin.