No. of Recommendations: 3
So I've finally slogged my way through the chapters on senior speculative securities and have now moved into what I've been waiting for ... common-stock analysis.

Jeez, G&D's analysis of "new era" attitudes towards common stocks sound awfully familiar. Like something one reads in the Rule Breaker Portfolio Report or the discussion boards for CSCO or AMZN.

Price vanishes from consideration. Earnings, and P/E ratios become far less important than a history of earnings growth. Book value? What's that?

"The Common-stocks-as-long-term-investments Doctrine. -- Along with this idea [of the central importance of the trend of earnings] as to what constituted the basis for common-stock selection, there emerged a companion theory that common stocks represented the most profitable and therefore the most desireable media for long-term investment. This gospel was based upon a certain amount of research, showing that diversified lists of common stocks had regularly increased in value over stated intervals of time for many years past. The figures indicated that such diversified common-stock holdings yeilded both a higher income return and a greater principal profit than purchases of standard bonds.

"The combination of these two ideas supplied the 'investment theory' upon which the 1927-1929 stock market proceeded. . . . [T]he theory ran as follows:

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