 Lately, I've been thinking about money a lot.
That happened because I ran short of it during a long, long time.
It seemed to me like even the New Yorker shared my concerns, what with a review of money books it recently published: Smart Money, by John Cassidy ("Two Wall Street classics appear in new editions").
Interesting books, by the way. One of them, The Intelligent Investor, teaches the layman the principles of "value investing."
Valuing companies based on the information contained in their financial statements constitutes an entire discipline, much of it established by Benjamin Graham and David Dodd in their 1934 textbook, "Security Analysis." Graham, who taught at Columbia Business School for years, and numbered Warren Buffett among his students, is regarded as the pioneer of "value investing," the painstaking pursuit of cheap stocks. In 1949, Graham explained his methods to the general public in "The Intelligent Investor" ... Buffett has described it as "by far the best book on investing ever written," and although the case studies it cites are now decades old, its practical advice on how to look at balance sheets and income statements is timeless. Followers of the Graham-Buffett approach to the stock market love nothing better than to spend an evening with a pencil and a calculator going through a stack of annual reports, trying to work out whether a company is trading above or below its intrinsic value.
The other one, A Random Walk Down Wall Street, makes the case that the market can't be beat through the "value" approach.
E.M.H. [Efficient Markets Hypothesis... which holds that a company’s stock prices already reflect all the available information about that company’s prospects], in one version or another, held sway in universities and business schools for more than a quarter of a century; even today, it is routinely taught to M.B.A. students. One of the people responsible for this state of affairs is Burton G. Malkiel, the Chemical Bank Chairman’s Professor of Economics at Princeton. Back in 1973, Malkiel, who was then a little-known professor, published a book entitled "A Random Walk Down Wall Street," which expounded efficient-markets theory for the layman. To the surprise of many, not least the author, it turned into one of the most durable investment guides ever written...
Interesting stuff. If only reading them guaranteed that I'd make easy money on the stock market...
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