DSE

On Ben Graham, Bank Stocks, Jason Zweig and Tom Brown

On Aug 04 08:14 AM jjason wrote:

> Also, Graham ( and Buffet ) worked in Wall Street. Most Americans
> work somewhere else and must rely on quarterly and annual reports
> and other sources of information that may be inaccurate, misleading
> or downright lies.

And you think Graham and Buffett haven't relied primarily on annual reports? For instance, Buffett supposedly bought PetroChina (selling it after it quadrupled) after only reading the annual report. Also, Walter Schloss, who's outperformed the market by a wide margin for half a century, said in a recent interview (the video is on the web) that he rarely even talks to management. Schloss is also widely diversified (holds a good 100 stocks at a time according to Buffett) and buys low-debt stocks selling near book value. Schloss also concedes that he just doesn't understand businesses as well as Buffett and therefore doesn't focus much effort at all on the qualitative factors (just like Graham). So I say, if you want to know what Graham would do, look to what Schloss, his former employee, is still doing now. I'm sure he has a bank or two in his fund(s), but they probably don't make up a significant portion of his holdings simply because of his aversion to leverage (an aversion that has likely served him very well this year).