Beyond the name, I’m not familiar with the school. Google helped me out on that one. ☺

Are you familiar with Fort Hays State University? That is my alma mater and the site you linked to was produced by my former advisor.

I just thought it was interesting. FHSU is a relatively unknown school in Western Kansas.

The full quote:

Interviewer: In selecting the common stock portfolio, do you advise careful study of and selectivity among different issues?

Graham:

In general, no. I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities. This was a rewarding activity, say, 40 years ago, when our textbook “Graham and Dodd” was first published; but the situation has changed a great deal since then. In the old days any well-trained security analyst could do a good professional job of selecting undervalued issues through detailed studies; but in the light of the enormous amount of research now being carried on, I doubt whether in most cases such extensive efforts will generate sufficiently superior selections to justify their cost. To that very limited extent I’m on the side of the “efficient market” school of thought now generally accepted by the professors.

(When asked to expand on one of his approaches):

This is similar to the first in its underlying philosophy. It consists of buying groups of stocks at less than their current or intrinsic value as indicated by one or more simple criteria…They consistently show results of 15 per cent or better per annum, or twice the record of the DJIA for this long period. I have every confidence in the threefold merit of this general method based on (a) sound logic, (b) simplicity of application, and (c) an excellent supporting record. At bottom it is a technique by which true investors can exploit the recurrent excessive optimism and excessive apprehension of the speculative public.

Hope that helps!

Where did you get the 1976 Graham quote? That is fascinating! He is quoted or referred to extensively by investors/journalists, but I’ve never seen anybody else mention that before. I’m interested in seeing the full context.

Reason being, I’ve tried a few times to get through Chapter 1 of Security Analysis, but if Graham is “recanting” maybe I should move that further down my reading list.

Great businesses steadily increase owner earnings and net worth and can stand on their own two feet without needing additional capital from outside sources (selling stock, assuming debt, etc.)

What should you look for? Start with:

1) Steadily increasing owner earnings;

2) Steadily increasing shareholder equity;

3) Low relative capital expenditures for maintenance of operations.

Find those businesses and you’ll be on your way. Hope that helps!

You talk about Keeping it Simple- but now a days nothing seems to be simple for the casual investor like myself? What 2 or 3 things should I be looking at when determining if I should be investing in a company?