On this site, we have at times made fun of the findings of various stock market analysts . In the book Managing Investor Portfolios: A Dynamic Process , the esteemed authors discuss some of the traps analysts fall into when making their forecasts. 1) Anchoring trap. The mind gives a ... R ... Read more

Wall Street is entirely too focused on current earnings, as noted by Ben Graham . So when a company shows declining earnings on declining revenues, the stock price will take a hit, even if the declines are purely cyclical. For example, consider the quarter-by-quarter revenue chart for K ... Read more

Recently, Berkshire filed its mandatory disclosures detailing its positions in various securities. As a result, you will undoubtedly see headlines beginning "Buffet Buys X Stock" and "Buffett Sells Y Stock". And when word gets out that Buffett has bought a particular stock, its shares j ... Read more

The following is a guest post by Garrett Chan, a private investor who is currently raising capital to start his own firm. He may be contacted by e-mail for those who would like more information or who have questions about the article. In its purest form, value investing is sim ... Re ... Read more

As the market has continued to soar while corporate profits have continued to plummet, many market observers have noted that the P/E level of the S&P 500 has risen to such an extent that an overvalued market is now upon us. Indeed, Standard and Poor's reports a P/E for the S&P 50 ... Read more

Though not exactly a book related to value investing, this oft-cited work of Princeton economist Burton Malkiel discusses many important features of stock market investing. An understanding of its prime contentions is useful for beginners and experts alike. Considering the mad ... Re ... Read more

Though not exactly a book related to value investing, this oft-cited work of Princeton economist Burton Malkiel discusses many important features of stock market investing. An understanding of its prime contentions is useful for beginners and experts alike. This chapter contai ... Re ... Read more

For those investors who recognize that professional money managers rarely beat the index , investing in passive funds (that basically spread the pooled investments across the index) makes a lot of sense. Investing in mutual funds that track the index used to be the best way to perform t ... Read more

Ben Graham noted that stocks of companies with some lingering uncertainties tend to have their valuations over-punished by the stock market. A pending lawsuit is one such example of a "lingering uncertainty". For this reason, many companies would rather settle legal claims that cast a ... Read more