Comparisons & Thoughts on Value – The Intelligent Investor Book Review (Chapters 16, 17, 18, & 19)

by | Jul 19, 2014 | Value

Graham urged shareholders to take an active role in being owners of the company. He thought management with good results should be rewarded, and management with poor results should be questioned and challenged.

He was particularly adamant about shareholders demanding a fair portion of their earnings returned in dividends. This is because much of the time companies squander past earnings. Just because management does a good job with current operations doesn’t mean they know the best use of excess company capital.

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Margin of Safety – Chapter 20 – The Intelligent Investor Book Review

by | Jul 12, 2014 | Value

The margin of safety for an investment is the difference between the real or fundamental value and the price you pay. The goal of the value investor is pay less (hopefully, much less) than the real value. Ben Graham called margin of safety “the secret of sound investment” and “the central concept of investment”. He also devoted a whole chapter to the concept and, I am confident, placed it last because it is the most important.

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Asset Allocation Plan – 7 Factors to Consider

by | May 26, 2014 | Portfolio Management

A well constructed asset allocation plan can lower portfolio volatility and increase returns at the same time! That makes asset allocation more important than which individual investments you choose for diversification.

Many financial firms give you standard platitudes about asset allocation plans. I’m going to challenge you to think skeptically about some of their commonplace thinking. Most of them leave out important aspects, such as expenses and valuation, because it doesn’t fit the products they sell. Here are the factors that are important and my thoughts on each.

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