Value Investing: From Graham to Buffett and Beyond Paperback – Jan 26 2004
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"No one can doubt there's an urgent need to think clearly about investing, since many investors in Silicon Valley companies have suffered a stock market decline comparable to the Crash of '29. The burned investor could find no better starting place than this superb book by four New York City value investors, all descended from the master of value investing, Benjamin Graham....They have written one of the most intelligent overviews of investing I've ever read, combining analytical rigor with intuitive description." (DAVID A. SYLVESTER, Published Sunday, Oct. 21, 2001, in the San Jose Mercury News)
"...Greenwald is an excellent guide on this subject..." (Sunday Times, 21 October, 2001) --This text refers to the Hardcover edition.
Individual investors in the Internet Age are blessed with information. We also are cursed with too much of the stuff, from real-time quotes to streaming videos of fund managers. This info-clutter extends to books, and cutting through it can be difficult, even dispiriting, when you see how little thought goes into so many books. That's why I've spent part of the summer doing it for you. And the new title most deserving of your time is Value Investing: From Graham to Buffett and Beyond. Its authors, Columbia Business School faculty members Bruce C.N. Greenwald and Michael Van Biema and fund managers Paul D. Sonkin and Judd Kahn, aim to place their work next to Benjamin Graham's 1950 classic, The Intelligent Investor. My 1986 edition came with Warren Buffett's endorsement--"by far the best book on investing ever written." Value Investing is better. --Robert Barker, BusinessWeek, AUGUST 13, 2001
No one can doubt there's an urgent need to think clearly about investing, since many investors in Silicon Valley companies have suffered a stock market decline comparable to the Crash of '29. The burned investor could find no better starting place than this superb book by four New York City value investors, all descended from the master of value investing, Benjamin Graham.... They have written one of the most intelligent overviews of investing I've ever read, combining analytical rigor with intuitive description." --DAVID A. SYLVESTER, San Jose Mercury News, Oct. 21, 2001
Greenwald is a conventional economist (Ph.D. from MIT) who caught the value bug. He has updated and expanded Graham's ideas, and his summer seminars ($2,900 for two days) have become popular with everyone from well-known money managers to Columbia MBAs who couldn't get into Greenwald's class. But now there is a cheaper way to learn from Greenwald: He and three colleagues have just published "Value Investing: From Graham to Buffett and Beyond." Greenwald probably won't outsell Graham, but I think he ought to. --Paul Sturm, SmartMoney Magazine, June 19, 2001
"Whether you've been working with stocks for years or are a beginner looking for a book that goes beyond price/earnings ratios, you'll likely get something worthwhile out of the book. I certainly did." —Pat Dorsey, Morningstar, 11/7/2001
"I finally have a good solution for those wanting an updated manual on value investing. Value Investing [is] essential reading for anyone looking for a fresh perspective on analyzing companies and selecting investments. Those with a little background in finance will benefit from the book's clear prose and its profiles of eight successful value investors, and stock-market veterans will enjoy the detailed case studies in which Greenwald applies his ideas to specific companies.... It is one of the better books on investing to hit the shelves in a while. Greenwald's detailed analysis of Intel INTC is by itself worth the price of admission, and other examples are similarly illuminating. Whether you've been working with stocks for years or are a beginner looking for a book that goes beyond price/earnings ratios, you'll likely get something worthwhile out of the book." (Secrets of Successful Investing' by Pat Dorsey, Morningstar.com)
"Value Investing [is] essential reading for anyone looking for a fresh perspective on analyzing companies and selecting investments." —Pat Dorsey, Morningstar.com
"Sophisticated yet accessible to people outside the orbit of business schools, Greenwald's book is a lively defense of, and handbook for, value investing, complete with glimpses of how it's practiced by pros like Warren Buffett and Mario Gabelli." —TheStreet.com, November 15, 2001--This text refers to the Hardcover edition. See all Product Description
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The very next day after I finished reading 'Value Investing' I attended a presentation, sponsored by NYSSA's Private Wealth Management Committee, where the author (editor?) presented the book. The presentation confirmed my first impressions: Not only is Mr. Greenwald confused about what Value Investing is but he doesn't seem to understand some fundamental concepts in Finance. For example, he claims that Compaq's major problem stems from the fact that the company put Alta Vista at market value on the balance sheet and then they had to write it off. Hasn't Mr. Greenwald heard about sunk costs? Investing in Alta Vista may have been a poor decision that destroyed shareholders' value but it is something that pertains to the past. It is not something that will continue to influence the firm's operating results in the future.
Greenwald claims that using asset valuation based on reproduction costs provides more accurate estimate of what the company might be worth then using NPV. According to him, NPV is too difficult to estimate and therefore is almost useless. I agree that NPV is difficult to estimate but if it was easy then everyone could be rich, right? In order to do better an individual investor must have a competitive advantage. Competitive advantage is something that one can do but the competition cannot. If balance sheet reading is easier than future cash flow forecasting then more investors should be able to do the former rather than the later. But if many people can do it then it does not give any competitive advantage.Read more ›
I think the authors' Earnings Power Value (EPV) approach to valuing a company is cutting edge. (Basically EPV is a rehash of Enterprise Value.) Most investors tend to value stocks based on P/E ratios - only looking at equity in a company. However, the proper way to value a company is to look at its whole capital structure - Debt, Equity & Cash. EPV is a much better tool than the P/E ratio for calculating whether a company is undervalued.
The second part of the book that profiles a half dozen or so successful value investors is interesting. It illustrates there are many different ways to execute a value oriented approach. The profiles do not give any hard cut rules that each investor follows, but it does give you a general idea. (I have been successful at applying some of the ideas in managing my own account.) The only flaw of the profiles is the lack of any type of track record. It would have been helpful to list the year-by-year returns for each investor compared to an index. (i.e. S&P 500 Index)
Overall, it's a great book and it deserves a spot behind Ben Graham's Security Analysis and Intelligent Investor.
Greenwald et.al. show a terrific aptitude for remaining informal and conversational while maintaining brevity and orderliness. Neophytes are unlikely to encounter a clearer, more concise explanation of 'discounting future cash flows', and most students of value investing will be well-served by Greenwald's order of equity valuation: (1) Asset Value, (2) Earnings Power, (3) Growth, all of which are clearly explained. Additionally, Greenwald discusses a useful addition to common metrics such as 'net asset value' and 'liquidation value' with the concept of 'replacement cost'. Greenwald also acknowledges and thoughtfully attempts to quantify the value investor's less traditionally acknowledged principle of 'franchise value', which he judiciously attributes to Warren Buffett as the latter's singular contribution to investment analysis.
The book's admirable brevity is also its primary shortcoming. Whereas Graham included senior debt and convertible debt vehicles both in Security Analysis and in his investment practices, this text is for all practical purposes only an examination of equities. If the authors of "Value Investing" ever opt to write about a value approach to bonds and other instruments, I'll bet they'd have a captive audience.
Most recent customer reviews
If you are to read only one book on value investing - make it this one. Yes, I said it. Because it builds on top of Ben Graham's all time classic, and you will learn the concepts... Read morePublished 12 months ago by John Doe
This is the best book I've read on value investing. Great insights, practical aproach, detailed and comprehensive, but user friendly.Published on Jan. 24 2011 by Blair L
This is a very lucid, practical introduction to the principles of value investing. It is detached, relatively objective considering the authors' bias in favor of the subject,... Read morePublished on June 7 2004 by Rolf Dobelli
There is simply not enough value in this book to justify using it. I'm sorry but words like Alta Vista and Cisco just should not appear anywhere in a value investing book. Read morePublished on Dec 29 2003 by James H. McDuffie
The values are out there, it is just a matter of finding them and knowing what to look for. This book has many ideas about how to find the values. Read morePublished on Oct. 30 2003
This is a very lucid, practical introduction to the principles of value investing. It is detached, relatively objective considering the authors' bias in favor of the subject,... Read morePublished on Oct. 15 2003 by Rolf Dobelli
I have read numerous books on the topic of investing, including Security Analysis, The Intelligent Investor, Common Stocks and Uncommon Profits, One Up on Wall Street, Beat the... Read morePublished on Feb. 14 2002
This book was a worthwhile and quick read. The author did a better job than other authors in relating the value approach to the theory of the firm, probability analysis, and... Read morePublished on Dec 9 2001 by Christopher Gable
Value investing is so unpopular now, that many do not know about this highly successful form of investing as practiced by its greatest masters. Read morePublished on Oct. 29 2001 by Donald Mitchell
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