An updated approach to classic security analysis
The principles of value investing outlined by Graham and Dodd in the 1940s continues to be used today by individuals and companies who face challenging investment decisions. A Modern Approach to Graham and Dodd Investing examines the classic Graham and Dodd approach to valuation and updates it for the twenty-first century. Thomas Au, a credentialed analyst with a leading insurance company and an ex-Value Line analyst, reworks the basics of value investing from net present value, financial statement analysis, and return on capital to return and leverage, asset allocation, and diversification. Through case studies and real-time analysis, A Modern Approach to Graham and Dodd Investing presents readers with examples that will make analysis and portfolio theory more relevant and powerful.
Thomas P. Au (Hartford, CT) is a Vice President and Portfolio Manager for the investment arm of a large insurance and healthcare provider. His specialty is emerging and international markets. He received his BA, cum laude, with a double major in economics and history, from Yale University, and an MBA in finance from New York University.
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Review
“A worthwhile read for investors interested in fundamental analysis following along upon the concepts of Benjamin Graham and David Dodd. The author remains true to the general principles and discipline of the two original fundamental investors when evaluating . . . more modern investments. Many readers may find these sections of particular interest. . . Mr. Au has attempted to extrapolate the thinking of two great investment authors of yesteryear. On balance, he has successfully completed the mission.”(Seeking Alpha)
From the Inside Flap
Benjamin Graham and David Dodd were among the first investors tomake the transition from thinking like traders to thinking likeowners. In the shadow of the 1929 stock market crash, they posed aset of questions that are still applicable today: What would areasonable businessperson, as opposed to a speculator, pay for acompany and still consider that he or she was getting a bargain?What entry price would almost guarantee at least an eventual returnof capital with good prospect for gains? Could a prudent investorreasonably allow for a margin of safety in his or her purchase?
Although the questions have remained the same, the ways toanswer them have changed. A Modern Approach to Graham and DoddInvesting examines the classic Graham and Dodd approach tovaluation and updates it for the twenty-first century. Thomas Au, aportfolio manager with a leading insurance company andex—Value Line analyst, reworks the basics of value investingfrom net present value, financial statement analysis, and return oncapital to return and leverage, asset allocation, anddiversification.
Before learning about the modifications to Graham andDodd’s principles of value investing, you’ll beintroduced to some basic investment concepts and mathematicalmeasures for the calculation of investment returns. Fromthere–although the focus of the book is onstocks–you’ll first become familiar with bonds, becausean understanding of the risk and return characteristics for bondsunderpins an understanding of those for equities.
Recent examples, including Enron and WorldCom, are introducedthroughout these pages, to illustrate exactly how you can use thisupdated approach to your advantage. Topics explored in thiscomprehensive book, include:
Part I: Basic Concepts
Part II: Fixed Income Evaluation–bills, notes, bonds
Part III: Equity Evaluation–cash flows, capital expenditures,asset value, dividends, earnings
Part IV: Special Vehicles for Investment–mutual funds,international investing, real estate
Part V: Portfolio Management–asset allocation, modern theoriesvs. Graham and Dodd
Part VI: Some Contemporary Issues–the Dow, excessive creditcreation, generational cycles in the American stock market
A Modern Approach to Graham and Dodd Investing examines thechanges that have taken place in the financial world since the daysof Graham and Dodd, and reveals the necessary modifications youmust make in order to apply these value investing principles intoday’s markets. Filled with in-depth insight and practicaladvice, this valuable resource offers an updated form of Graham andDodd that will help you face today’s market realities.
Description:
An updated approach to classic security analysis
The principles of value investing outlined by Graham and Dodd in the 1940s continues to be used today by individuals and companies who face challenging investment decisions. A Modern Approach to Graham and Dodd Investing examines the classic Graham and Dodd approach to valuation and updates it for the twenty-first century. Thomas Au, a credentialed analyst with a leading insurance company and an ex-Value Line analyst, reworks the basics of value investing from net present value, financial statement analysis, and return on capital to return and leverage, asset allocation, and diversification. Through case studies and real-time analysis, A Modern Approach to Graham and Dodd Investing presents readers with examples that will make analysis and portfolio theory more relevant and powerful.
Thomas P. Au (Hartford, CT) is a Vice President and Portfolio Manager for the investment arm of a large insurance and healthcare provider. His specialty is emerging and international markets. He received his BA, cum laude, with a double major in economics and history, from Yale University, and an MBA in finance from New York University.
**
Review
“A worthwhile read for investors interested in fundamental analysis following along upon the concepts of Benjamin Graham and David Dodd. The author remains true to the general principles and discipline of the two original fundamental investors when evaluating . . . more modern investments. Many readers may find these sections of particular interest. . . Mr. Au has attempted to extrapolate the thinking of two great investment authors of yesteryear. On balance, he has successfully completed the mission.”(Seeking Alpha)
From the Inside Flap
Benjamin Graham and David Dodd were among the first investors tomake the transition from thinking like traders to thinking likeowners. In the shadow of the 1929 stock market crash, they posed aset of questions that are still applicable today: What would areasonable businessperson, as opposed to a speculator, pay for acompany and still consider that he or she was getting a bargain?What entry price would almost guarantee at least an eventual returnof capital with good prospect for gains? Could a prudent investorreasonably allow for a margin of safety in his or her purchase?
Although the questions have remained the same, the ways toanswer them have changed. A Modern Approach to Graham and DoddInvesting examines the classic Graham and Dodd approach tovaluation and updates it for the twenty-first century. Thomas Au, aportfolio manager with a leading insurance company andex—Value Line analyst, reworks the basics of value investingfrom net present value, financial statement analysis, and return oncapital to return and leverage, asset allocation, anddiversification.
Before learning about the modifications to Graham andDodd’s principles of value investing, you’ll beintroduced to some basic investment concepts and mathematicalmeasures for the calculation of investment returns. Fromthere–although the focus of the book is onstocks–you’ll first become familiar with bonds, becausean understanding of the risk and return characteristics for bondsunderpins an understanding of those for equities.
Recent examples, including Enron and WorldCom, are introducedthroughout these pages, to illustrate exactly how you can use thisupdated approach to your advantage. Topics explored in thiscomprehensive book, include:
Part I: Basic Concepts
Part II: Fixed Income Evaluation–bills, notes, bonds
Part III: Equity Evaluation–cash flows, capital expenditures,asset value, dividends, earnings
Part IV: Special Vehicles for Investment–mutual funds,international investing, real estate
Part V: Portfolio Management–asset allocation, modern theoriesvs. Graham and Dodd
Part VI: Some Contemporary Issues–the Dow, excessive creditcreation, generational cycles in the American stock market
A Modern Approach to Graham and Dodd Investing examines thechanges that have taken place in the financial world since the daysof Graham and Dodd, and reveals the necessary modifications youmust make in order to apply these value investing principles intoday’s markets. Filled with in-depth insight and practicaladvice, this valuable resource offers an updated form of Graham andDodd that will help you face today’s market realities.