The Intelligent investor by Benjamin Graham | Episode 1 |
The Audiobooks Podcast
The Law of Diminishing Returns
In 1949 we could present a study of stock market fluctuations over the preceding 75 years. It supported a formula based on earnings and current interest rates for determining a level to buy the Dow Jones Industrial Average below its central or intrinsic value, and to sell out above such value. Alas, after 1949 this formula no longer worked. A good part of our own operations on Wall Street had been concentrated on the purchase of bargain issues eighly identified as such by the fact that they were selling it less than their share in the net current assets alone.
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