“We already see resurgent the age-old frailty of the investor – that his money burns a hole in his pocket.” Thus wrote Benjamin Graham in his seminal work on value investing, Security Analysis, written in 1934. Yet those words are just as relevant in today’s investment climate where many once again think that all they need to do to succeed in investing is to buy stocks of glamorous, high-growth companies. Valuation is once again perceived to be only of passing interest, a topic focused on by those unsophisticates that have not evolved to a higher level of understanding, one that allows the true investing gurus to pinpoint the future of rapidly growing companies 15+ years out.
If you have been paying any attention to the rising stock market in the last couple of years, you might be tempted to succumb to this siren-song and relax your investment criteria in order to join those appearing to make money quarter after quarter in high-expectation growth stocks. Don’t… at least not until you read this article.Read More