No. of Recommendations: 2
I recently got a book by Frederick Martin called "Benjamin Graham and the Power of Growth Stocks". It contains a copy of Chapter 39 from the 1962 edition ("New Methods for Valuing Growth Stocks") from "Security Analysis" that Martin says is missing from later editions.

My copy of Security Analysis is from 1962. It is a reprint from an earlier edition. It says: "Security Analysis, now in its fifth, edition... To commemorate the book's great achievement, and to reintroduce to readers the original ideas and language of the first edition, McGraw-Hill is proud to publish this special reproduction of the 1934 book."

The 1934 version does not have this Chapter 39. Apparently the fifth edition (1962?) does but is removed from later editions. My point is that valuation is a moving target. While the foundation of valuation, which I described in an earlier post, does not change, the ways we try to find intrinsic value do change considerably as business and technology evolve. Over at Value Hounds, two or three years ago LeKitKat complained that her long and deep analysis of the number -- considered 'Most Excellent' by most Fools -- were not producing the outstanding investing results they were supposed to help generate. She has pretty much abandoned her board.

The influence of the market, as opposed to intrinsic value, is not sufficiently recognized by value investors. Let me put it another way, sequencing Joe Montana's genome will not tell you how many games he'll win. It might tell you that he's not fit to play football. I look at business model and market performance as reasons to buy and at "fundamentals" as reasns not to buy.

My suggestion for investors, learn the basics of accounting but don't waste your time diving in too deep. Saul is a pretty good role model!

Denny Schlesinger
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