Top Ten Investment Books

#The Theory of Investment Value by John Burr Williams

This book is still in print sixty years after it was written, despite never having been updated or revised. That testifies to its classic status, in a field, financial analysis, which generally changes rapidly.

The author defines the “Investment Value” of a stock to be the net present value of all its future dividends. This definition provides a measure of intrinsic value which is independent of stock market prices, enabling the investor to assess whether the current market price is high or low compared with the Investment Value of the stock.

A calculation of Investment Value inevitably requires estimation of factors such as future growth of earnings, the proportion of earnings that can be paid as dividends, and an appropriate discounting rate. The author does not shy away from making such estimates, and the book includes practical case studies for three current (in 1938) valuations, General Motors, United States Steel and Phoenix Insurance, as well as thr! ee retrospectives to 1930, AT&T, Consolidated Gas (Con Ed) and American and Foreign Power.

While the facts of these valuations are long ago, the methods are still applicable today. A great self discipline for investors would be to always prepare their own estimate of Investment Value before buying any stock.

The book is accessible to any general reader. A casual glance will show some apparently off putting algebra. This should be manageable to anyone who has finished high school, and arises only because in 1938 the author did not have the benefit of computer spreadsheets for doing growth projections and discounting calculations. The reader should find it straightforward to apply the author’s methods with modern computing resources.

While the above comments imply a book that is worthy but dull, the book is in fact anything but dull. The author writes grippingly well, illustrated by this extract:
“Concerning [a stock’s] true worth, every man will cherish his own opinion; as to what price really is right, time only will tell. Time will not give its answer all at once, though, but only slowly, word by word, as the years go by; nor will the last word be spoken till the corporation shall have closed its books for ever and ever. Those who bought their stock long ago will know their answer in the main by now, but those who buy now will hear theirs only in the future.”

I would commend this book to every investor or student of finance. -review written by M. Amin.

The Future for Investors by Dr. Jeremy Siegel

Anyone who enjoyed Stocks for the Long Run will find this book to be a very valuable addition to his or her knowledge about stock investing for tax-deferred investment accounts.

Professor Siegel has checked history again. This time he has looked for ways to do stock investing that have performed better than indexed mutual funds for tax-deferred accounts.

Much of what he finds is counter to the conventional wisdom, but makes sense when examined objectively.

Here are some key findings:

1. High dividend yields, when reinvested in the same stock, provide superior returns. That’s only true in a tax-deferred account, of course.

2. Buying stocks with low multiples that grow faster than expected is much easier and more profitable to do than simply choosing companies in fast growing industries.

3. Exciting new companies make lots of money for founders, employees and venture capitalists . . . but not enough for investors.

4. Avoid capital intensive businesses.

5. The most productive companies are those who develop new business models (something I discuss in The Ultimate Competitive Advantage) regardless of how bad the industry is.

6. Beware of excessive valuations . . . no matter how good the future looks.

7. If a company has neither a high dividend nor any cash, assume something’s wrong with the accounting.

8. Indexed stocks in slower-growing emerging markets have high potential to deliver huge gains in the future due to demographic influences.

From these findings, Professor Siegel suggests a model portfolio for equities that will intrigue you (see page 254) with high-dividend ideas, global firms, attractive sectors and interesting value plays.

In addition, Professor Siegel addresses the question of what to do about paying for the retirements of all those Baby Boomers around the world. His proposal is to encourage young emerging market workers to purchase the assets of older workers in the developed world. You’ll find the argument to be intriguing and compelling.

I cannot remember reading a more stimulating and original book about investing. I was particularly impressed by his historical research that shows the superiority of sticking with companies that have been around a long time rather than searching out newer companies to buy. I think the exception to the latter comes in those cases where the management has proven to be adept at improving upon their business models to provide more value to customers. -review written by Donald Mitchell.

Poor Charlie’s Almanack by Charlie Munger

You can’t afford to not read this. Think of it as a gift to humanity from a higher more intelligent species – Its something you don’t want to go through life having missed.

I spend about 16 hours a day researching financial markets/value investing.

I have read over 50 books on related subjects – No book has influenced my thought process more that this one. It is simply amazing.

You will not get the value from this book when you close the last page, but when you see the world relate in the ways Munger lays out for you. This is one of the greatest minds and business and he tells you his secrets. The last chapter on the psychology of human misjudgment will live on past Munger’s days. It is his greatest work and is invaluable information. The way your brain fires and works will literally physically change over time from the things this book teaches you. Its a mind trainer – it teaches you how to look at problems. It is worth its weight in platinum.

I don’t care who you are. You need to buy this and pound his ideas in your head. You won’t even think its that great as you read it and might even wonder why it is praised so much. Over time, you’ll see things how Munger does and start to think like Munger does. Whatever field you are in, this book will help you to look and analyze problems and the world as a whole in a different more intelligent manner. Again, I cannot praise or recommend this book enough. When your done with it and look back years later, this odd review I just wrote will make crystal clear sense to you. Your welcome. -review written by Richard E. Pitts, Jr.

The Millionaire Next Door by Dr. Thomas Stanley

I’m frugal, yet this book excited me so much that I bought a pile of them and gave them to many close friends with strong urgings to read. The second time this has ever happened to me. This book presents a realistic method for becoming financially independent. The key element is saving 15% of your pre-tax income, and investing that for the long term. What a small price to pay for true financial freedom! A core idea implied here is changing the typical American “order of operation”. By sacrificing some spending now, one can then have plenty of toys and goodies later, if that is important. Or do whatever you want – free of a ball-and-chain job. An unexpected bonus was a look into the (counter-intuitive) effects of parents giving substantial sums of money to adult children.

Hint – it usually makes them worse off financially in the long run. They also had some excellent data on thinking about your investments in AFTER-tax terms. This was before index funds became the rage, and I hadn’t thought enough about this. Simple, practical advice that helped me seek out better alternatives, and therefore a more lucrative long term strategy. What I really liked about this book was that it presented the “live an honest, frugal, and hardworking life” in a practical context – that of reaping the substantial reward of financial freedom. For so many of these people, the independence they had gained, and the personal pride and contentment in that freedom made them so happy, it’s hard to imagine any amount of consumer goods providing that.

Life, liberty, and the pursuit of happiness…hmmm – sound familiar? For me it was a great motivator. While I’m much younger than the typical late 50ish to early 60ish millioniare interviewed, it showed me that I’m well on track if I just keep at it. That has REALLY helped for the past several years. If you’re looking for a quick fix or magic bullet, or you can’t stand the idea of giving up some of your pretax income for now – to have a much better financial life down the road, then this book isn’t for you. However, if you are willing to consider some spending moderation, and are looking for practical advice that will truly work – this book is definitely for you. ***ANYONE*** with a moderate (say $30K and up) income, plus some desire and self discipline can become truly self sufficient financially – let freedom ring! I think that’s truly wonderful, and this book can set you on that path. -Anonymous review.

The Five Rules for Successful Stock Investing by Pat Dorsey

Don’t just read this book and let it languish on your library shelf. STUDY this book carefully, and keep it with you for reference.

Chapter 5, “Financial Statements Explained” is in my opinion, the most important part of the book. As an investor, understanding what the Cash Flow Statement and Balance Sheet is telling you is the only way to understand what’s really going on in the company.

Did you know that the Accounts Receivable entry can tip you off that the company may be in trouble? The Balance Sheet can tell you if anything is tying up the companies cash flow and reducing earnings.

You can’t discover this essential information any other way than by reading the financial statements and understanding them. Pat Dorsey, the author, is a master at explaining these important concepts without talking down to the reader. You probably won’t take everything in on the first pass through the book. It will require some time and work on your part to really understand what Dorsey is saying, but then when has anything worthwhile in life come without effort?

If you can buy only one book on investing this year, buy this one. If only it had been available when I first started investing. -review written by Vincent Labash.

Common Stocks and Uncommon Profits by Phil Fisher

Having been associated with Wall Street for 35 years, I was lucky enough to have been in the same room with Philip Fisher on more than one occasion. He was a completely self-contained man, extremely comfortable in his own skin. He knew who he was, what he was, and what he could be. He possessed zero airs about him. These traits seem to run freely in many MASTER investors, including Warren Buffett.

Many have mentioned that Buffett considers himself to be 85% Benjamin Graham, and 15% Philip Fisher. This needs to be updated. If you spoke with Buffett today, he would tell you that those ratios are distorted, and the reason is Charlie Munger, Warren Buffett’s investing partner at Berkshire Hathaway.

Charlie Munger is cut from the same cloth as Philip Fisher. They are growth players, and willing to pay up for a stock. For decades Buffett could NEVER PAY UP for a stock. He wanted them dirt cheap, so cheap in fact that some big plays got away from him forever. I don’t know how many years ago, Buffett mentioned in a meeting I attended that he once owned a considerable amount of Disney. It would be a controlling amount in today’s market; it got away from him, and tens of billions of dollars in that play alone.

In the old days when Buffett was strictly Graham and Dodd, he could not buy a GROWTH stock. He still cringes at the thought. Munger however taught Buffett to pay up. An example was Flight Safety International for which Buffett paid a previously unheard price-earning ratio. There are people around Buffett who know him well who will tell you that Munger is the superior investor. What you need to know is that sometimes stocks are DIRT CHEAP because they are DIRT, to use a Munger line.

Philip Fisher like Munger is a MASTER INVESTOR worthy of spending whatever time you can spare studying. If you want to walk in the footsteps of a MASTER, you must study the MASTER, and Fisher has a tremendous amount to offer.

I have managed billions of dollars in my lifetime. I am telling you this because you need to know that the SKUTTLEBUTT method that Fisher is famous for is something that anyone can used, starting today. Most of Wall Street research or any research that I have seen over the decades is not worth the paper it is printed on. On more than one occasion I have asked if the paper is soft enough to use for toilet paper.

With the scuttlebutt method, you talk to everyone but the company you are studying. Please allow me to illustrate. If you are thinking of investing in a car company, you start visiting car dealers. You learn the lingo, you read trade periodicals, maybe even a few car magazines, but be careful. Magazines and newspapers are completely jaded in their reporting by how much advertising dollars they receive from certain companies. You didn’t know that because no one will ever dare print it.

If a newspaper wants to bury an important story on a company that gives them tremendous advertising dollars, they will run the unfavorable story, but it will be in the Saturday morning edition, which is the least read edition of the week. You need to know these things. I used Scuttlebutt back in the 80’s, to accumulate a massive position in Chrysler when it was near bankruptcy. The stock went from $6 to $200 after splits. It isn’t hard. You don’t need to be a big market player, anybody really can do it.

You do need an inquisitive mind, and I believe an innovative one as well. Fisher was a guy who thought outside the box, and that’s why he was immensely rich, as is his son Ken. Philip Fisher is a guy that made a fortune in FMC Corporation, owned it for 30 or more years. He was a ground floor player in Texas Instruments, owned it and made thousands of percent on the stock. He was every bit Buffett’s equal, and to Fisher’s credit, he gave us the greatest gift of all. He wrote a book, and was open with his readers about how to attain great wealth in the market.

He takes the “Efficient Market Hypothesis” (EMT), and blows it out of the water. His returns and Buffett’s are so many standard deviations away from the mean, that EMT can’t survive an investigation based on their results.

He gives you a 15-point criteria list to identify the types of companies that meet his screening. He also gives you five don’ts, and then five more to protect you as an investor. What Fisher is really doing is giving you a TEMPLATE to used as an investor. This is what you need. This is no different than going into the Marine Corps, and spending 12 weeks in basic training. Once you’re done, you have certain smart behaviors drilled into your psyche so deep that in combat, and investing is combat, you can fall back on these techniques to survive. They become automatic. No matter what investment turns up, you can put it through the filters that have stood the test of time.

In closing, I would like to say one more thing about the Scuttlebutt technique. Recently, I had to make a decision to invest a considerable amount of money in the auto sector. One of the people I consulted with, is a legend in his 90’s, who is the greatest mutual fund investor of the 20th century, probably worth over a billion dollars. He says to me in passing, do you know whom Toyota, the greatest car company in the world fears? The answer is the South Korean car companies. That my friends is worth a fortune, and is a 20 year stock play that Philip Fisher would have envied. -review written by Richard Stoyeck.

The Richest Man in Town by W. Randall Jones

W. Randall Jones, founder of Worth Magazine, identified and interviewed the Richest Man in Towns (RMITs) in one hundred American towns and cities. Jones selected self-made types who found their own paths to success through hard work and their creativity. While members of this select group span a range of companies and industries, they share certain traits. Jones calls these traits the Twelve Commandments of Wealth.

Here are the first few:

1. Seek Money for Money’s Sake and Ye Shall Not Find.
– Wealth comes from a contribution of real value

2. Find your perfect pitch
– Know your own unique strengths and talents and match them with your personal passion.

3. BYOB: Be your own boss
– Don’t work for someone else, found your own enterprise. Choose partners carefully – only those who bring something critical to your success.

The bulk of the book is devoted to describing these Twelve Commandments of Wealth and sharing how successful men demonstrated these traits. Anecdotes come from a diverse group of successful folk. Here are just a few: Michael Dell, Stephen King, Sam Zell, Fred Smith, Carl Icahn, John McAfee, Bill Gates, Sergey Brin, and Larry Ellison.

Aside from describing the traits, Jones offers exercises to help us find our strengths and individual paths to wealth. For instance, when describing the need to look for more than money, he suggests writing your own obituary to visualize your lifetime goals.


I found The Richest Man in Town: the Twelve Commandments of Wealth to be an interesting and absorbing read largely because of the wealth of stories shared by his sources.

Some of the quotes are particularly memorable and here are a few that I can’t resist sharing:

“I always tell young people there is no substitute for hard work and diligence. It takes eight hours a day of hard work to be a success, but it takes most people twelve or thirteen hours a day to do eight hours of good work.”
– Joe Taylor, former CEO of Southland Log Homes and secretary of commerce for SC

“Everyone should have at least one silent goal. This is a goal that is known only by you. It’s a reach goal, one that is extremely hard to attain, but potentially life altering, even world changing. These kinds of world-changing goas are realized by only very few people. If you don’t reach them, you certainly won’t be judged by others-it’s your well-kept personal secret.”
-Dr. Thomas Frist Jr., co-founder of Hospital Corporation of America (HCA), the largest for-profit hospital management company

As I read, my copy slowly filled up with post-it tabs and notes. I highly recommend the book for those interested in business books and personal finance and for their loved ones who might need personal finance tips. -review written by Gabby at Starting Fresh.

One Up On Wall Street by Peter Lynch

I assume you already know who Mr. Lynch is (a former fund manager), and what Mr. Lynch did (he consistently beat the market – “he has a proven track record” – for almost twenty years).

The book has a witty, easygoing style; it’s entertaining and informative, and you’ll pretty soon find the urge to read it all as soon as possible. Beware, it’s not an easy book! To read this book is not a substitute for hard work. There are no magic formulae to apply. There are no shortcuts to riches, you have to do your homeworks anyway!

“One Up” is divided in three sections. The first deals with how to assess yourself as a stockpicker; the second deals with how to find the most promising opportunities, what to look for in a company and what to avoid, and what to make of the various numbers (p/e ratio, book value, cash flow, etc – explanations are clear, this is a book for everyone) that are often mentioned in technical evaluations of stocks. The third part basically is about everything else, including when to buy and when to sell.

Mr. Lynch opens the book with his rule number one, devoted to those believing that professionals will do better than individuals because professionals know more and have more skills (I’ll extensively quote him): “Stop listening to professionals! Twenty years in this business convinces me that any normal person (…) can pick stocks just as well, if not better, than the average Wall Street expert”. No wonder here and there we find 1-star, angry reviews of this book!

Here are, in my opinion, the basics of this book:

The Street Lag
“Under the current system, a stock isn’t truly attractive until a number of large institutions have recognized its suitability and an equal number of respected Wall Street analysts (the researchers who track the various industries and companies) have put it o the recommended list. With so many people waiting for others to make the first move, it’s amazing that anything gets bought.”

A Good Market or a Bad Market
“Thousand of experts study overbought indicators, oversold indicators, head-and-shoulder patterns, put-call ratios, the Fed’s policy on money supply, foreign investment, the movement of the constellations through the heavens, and the moss on oak trees, and they can’t predict markets with any useful consistency.” Is the current a good market? Please don’t ask. Don’t try to time the market.

The Perfect Stock
“Getting the story on a company is a lot easier if you understand the basic business. That’s why I’d rather invest in panty hose than in communications satellites, or in motel chains than in fiber optics. The simpler it is, the better I like it. When somebody says, “Any idiot could run this joint,” that’s a plus as far as I’m concerned, because sooner or later any idiot probably is going to be running it.”

How to find the tenbaggers
(“In Wall Street parlance a “tenbagger” is a stock in which you’ve made ten times your money”.)
Among other “qualities” to look for, explained by Mr. Lynch, the following are my favourites:
– Its name sounds dull – or, even better, ridiculous;
– It does something dull;
– The institutions don’t own it, and the analysts don’t follow it;
– It’s got a niche;
– The insiders are buyers;
– The company is buying back shares.
Of course, Mr. Lynch describes in detail why he thinks you have to look for these aforementioned (and others) qualities in a stock to qualify it as a “buy”

The flaw in Book Value
“Book value gets a lot of attention these days – perhaps because it’s such an easy number to find. You see it reported everywhere (…). People invest in these on the theory that if the book value is $20 a share and the stock sells for $10, they’re getting something for half price. The flaw is that the stated book value often bears little relationship to the actual worth of the company. It often understates or overstates reality by a large margin. Penn Central had a book value of more than $60 a share when it went bankrupt!”.

I can summarize the only weakness I found in this book after the following quotation:
“At one point I’d decided the motel industry was due for a cyclical turnaround. I’d already invested in United Inns, the largest franchiser of Holiday Inns, and I was keeping my ears open for other opportunities. During a telephone interview with a vice president at United Inns, I asked which company was Holiday Inn’s most successful competitor.

“Asking about the competition is one of my favorite techniques for finding promising new stocks. Muckamucks speak negatively about the competition ninety-five percent of the time, and it doesn’t mean much. But when an executive of one company admits he’s impressed by another company, you can bet that company is doing something right. Nothing could be more bullish than a begrudging admiration from a rival.
“La Quinta Motors Inns”, the vice president of United Inns enthused. They’re doing a great job. They’re killing us in Houston and in Dallas.”
“He sounded very impressed, and so was I.”

Well, I guess everybody out there can pick up the telephone and have a nice, revealing conversation about the competition with a big company’s vice president, uh? Don’t you believe this to likely happen to you as well, do you?

And just in case, SEC’s Regulation Full Disclosure made it almost impossible anyway (God bless Arthur Levitt, former SEC chairman, who gave us the Reg FD – after Mr. Lynch wrote this book).

That aside, what a great book! I definitely recommend this timeless classic. -review written by Giancarlo Nicoli.

The Aggressive Conservative Investor by Martin Whitman

I am a fan of value investing in all of its different variations, and so when I run across a book on the topic, particularly from a skilled practitioner, I buy it. I’ll do more book reviews on value investing, but one of the first that I wanted to do was Value Investing, by Marty Whitman.

So, I start looking around for my copy, and I can’t find it. Arrrgh, I can guess what happened. I lent it out, I can’t remember who I lent it to, but the borrower never gave it back to me. Annoyed at myself, I do notice a book that was just as good, The Aggressive Conservative Investor, by Marty Whitman and Martin Shubik. Even better, it is back in print, after being out of print for 20+ years.

So, what’s so great about the book? (Most of this applies to both books.) Marty Whitman has a strong “What can go wrong” approach. He realizes that he, and most other investors, will be outside passive minority investors. We only ride on the bus. The inside active control investors drive the bus, and if we are going to make money with reasonable safety, we have to understand the motives of those that control the companies. They benefit somewhat disproportionately from control. They receive wages and benefits that other shareholders do not receive, can gain cheap outside financing, and limit tax exposures, in addition to other benefits.

Like me, Whitman doesn’t care much for modern portfolio theory. More notable for a value investor, he has a few criticisms for the traditional “Graham-and-Dodd” type of value investing.

* Typically, it works best for “going concern” situations, and not situations where activism could be necessary to unlock value. (Though, Graham did do things like that in his career; he just didn’t try to teach amateurs about it.)
* He doesn’t always stick to high quality companies, if enough information can be obtained about the target. Information allows for more risk to be taken.

There are four things that he insists on in equity investments:

1. Strong financial position
2. Honest management that is creditor-aware and shareholder-oriented
3. Adequate disclosure of information relevant to the success of the company
4. The stock can be bought for less than the net asset value (adjusted book value) of the firm.

If you have these items in place, you won’t lose much, and if the management team makes value enhancing decisions, one can make a lot of money on the stock.

Whitman places a lot of stress on reading through the documents filed with the SEC. They may not be perfect, but managements know that they need to provide adequate disclosure of material information, or they could be sued. A lot gets revealed in SEC filings, and not every investor sees that.

He also places great stress on understanding the limitations of the accounting, whether under GAAP, Tax, or any other basis. Comparing the various accounting bases can sometimes illuminate the true financial well-being of a company. (Note: this is what killed me on Scottish Re. I should have questioned the GAAP profitability, when they never paid taxes.) He lists the underlying assumptions behind GAAP accounting, and explains how they can distort the estimation of economic value. Honestly, it is worse today in some ways than when he wrote the First Edition in 1979. GAAP accounting is more flexible, and less comparable across companies today.

Marty Whitman looks for situations where resources in a company can be used in a better manner, creating value in the process.

* Is the company too conservatively financed? Perhaps borrowing money to buy back stock, or issuing a special dividend could unlock value.
* Are there divisions that are undermanaged, or would fit better in another company?
* Are management incentives properly aligned with shareholders?
* Would the company be better off going private?
* Is government regulation a help or a hindrance? (Barriers to entry)
* Analyzing corporate structures for where the value is.

Beyond that, he explains how to calculate net asset values, as distinct from book values. He describes the problems with earnings as a value metric. He explains the value of dividends and other distributions. He also explains when it can make sense to own companies that are losing money. (Underlying values are growing in a way that the tax accounting basis does not catch.)

It’s a good book. Together with Value Investing, it gives you a full picture of how Marty Whitman thinks about value investing. He is one of the leading value investors of our time, but he has spent more time than most on the underlying theory. For those who want to think more deeply about value investing, Marty Whitman is a highly recommended read. -review written by Dave Merkel at the Aleph Blog.

Security Analysis by David Dodd and Benjamin Graham

This is probably the most famous book of all books in the investment arena, quoted as one of the most important books by several investment legends like Warren Buffet. Buffett who had Graham as a teacher, and who was his favourite student earning the highest grade was the only one to have been given an A+. After he graduated Buffett went on to work for Graham’s fund.

The first edition was written in 1934, at the depth of the depression, which inspired Graham to search for a more conservative, safer way to invest. Graham agreed to teach at Columbia University with the stipulation that someone took notes. Dodd, then a young instructor at Columbia, volunteered. Those transcripts served as the basis for this book that “created” the concept of value investing. The second edition is a slight update, and considered by many to be the best.

However, it’s over 70 years old, and personally I have always felt it rather dated and there are numerous other more modern value investing books that are easier to relate to. That’s why when this book, the 6th edition, arrived in 2009 I jumped with joy since almost everyone who is anyone in the value investing arena has contributed personally. Warren Buffett has written the foreword, Seth Klarman is the editor writing an excellent preface, and finally James Grant writes an intriguing introduction. Then follow comments from various famous people, putting Graham’s theories into a current setting.

The book has eight parts, and the mission is Security Analysis, securities meaning stocks, bonds and variations of that. Roughly half of the book deals with stocks, and the other bonds etc. I think it’s enough to read part 1 – the essential lessons and part 5 – analysis of the income statement, if you are focused on stocks. The rest is either not equity related or to detailed and frankly sometimes boring. However the introduction to each chapter by current superstars is an easy must read. They give an up to date view on each part, its relevance today, where they agree and disagree, and how they use it in their current business.

I would highlight Howard Marks text on bonds, Bruce Berkowitz who writes about stock dividends, and finally Bruce Greenwald who writes about the balance sheet and implications on valuation.

There is a wealth of timeless advice in the book, to me the following are among the simplest and most practical ideas Graham has. With regard to timing: “It is our view that stock market timing cannot be done unless the time to buy is related to an attractive price level, as measured by analytical standards.” He went further suggesting that “the investor should calculate a normalised earnings number, based upon the history, last 5-10 years, and a conservative estimate on the future.”

Everyone is a product of the time that we live in. Clearly Mr Graham was no exception. He was born in 1894 and his family was ruined in the crash of 1907. He graduated from Columbia 1914, worked as an analyst, followed by starting an investment firm (Graham & Newman) in 1926. His work before the crash indicates that he was a conservative investor already before the market crash 1929, but the depth of it clearly also took him by surprise. He lost a lot of the money and some even suggest he was ruined.

Jason Zweig, the editor of the second edition, says he lost 70% 1929-1932. From then his Graham-Newman corp had 14.7% annual return 1936-1956, vs market 12.2%, it was a fund closed to outside investors, (pre 2/20 fees it was >20% per annum). But as he grew older he changed his mind a bit. In the 70s he stopped advocating a use of the techniques described in his text in selecting individual stocks, citing the extensive efforts and costs required to generate superior returns in a modern efficient market. His way of finding bargains became more difficult, but this wasn’t a problem for his A+ student. Warren Buffett quickly adopted reading one more book, Philip Fishers, Common Stocks and Uncommon Profits. The result is investment history. -review written by Investing by the Books.