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Tom Au, CFA
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In the early 1990s, during the middle of a secular bull market, I began work on "A Modern Approach To Graham and Dodd Investing," that was not particularly suited for the decade of the 1990s, but was ideally suited for the following "Lost Decade" of the 2000s.
My book:
A Modern Approach to Graham and Dodd Investing
  • Some Thoughts on Earnings Misses 0 comments
    May 21, 2009 4:02 PM

    Two or three months ago, stocks of companies that missed earnings were considered "innocent until proven guilty." Now it seems that they are "guilty until proven innocent."

    Cases in point today are Gamestop and Hot Topic, which are getting hammered. But they are only giving back their recent gains. Consumer goods stocks have rallied more than most in the recent upswing.

    I used to own Hot Topic, at less than half its current price, below book value. I can't sell it today, haven't done so earlier. But I would if I could (but I don't have a short mandate). 

    A stock selling around book value, Graham and Dodd style, has a balance sheet to fall back on. A stock selling at a multiple of book is hostage to earnings.

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