Abstract
Oyster points out that the philosophy employed by most stock-picking active managers was developed many years ago. He mentions that Benjamin Graham, the father of fundamental analysis, knew that buying good companies at an attractive price could add value over time. Oyster describes Graham as a brilliant visionary and one who remains among the most revered investment minds of all time. The problem with his philosophy, Oyster surmises, is that it’s actually too good. It worked until its impact was diluted by overuse.
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Notes
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Charles Stein, “Active vs. Passive Investing,” Bloomberg.com, December 4, 2017.
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Aye M. Soe, CFA, Ryan Poirier, FRM, S&P Dow Jones, A Division of S&P Global, “SPIVA® U.S. Scorecard,” Year End 2016.
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Benjamin Graham, The Intelligent Investor, revised edition (New York: Harper Business Essentials, 2003).
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Patrick Morris, “3 Books That Changed Warren Buffett’s Life,” The Motley Fool, December 25, 2013.
- 8.
John Burr Williams, The Theory of Investment Value, Harvard University Press, 1938.
- 9.
Benjamin Graham, The Journal of Political Economy, Volume XLVII, April 1939, Number 2, 276.
- 10.
Begintoinvest.com, “What Stocks Would Ben Graham Buy Today? Q1 2018,” January 4, 2018.
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Oyster, M.J. (2018). An Obsolete Fundamental Philosophy. In: Success in a Low-Return World. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-99855-8_2
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DOI: https://doi.org/10.1007/978-3-319-99855-8_2
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