Investing, Quotes

What Can You Learn from Someone Who Has Returned 586,817%?

By Kanwal Sarai
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Since 1964 Warren Buffett has been able to increase the book value of shares in his company by 586,817%. Therefore I believe he is the best person to answer the following question:


If value investing is so easy, why isn't everyone doing it?


"I can only tell you that the secret has been out for 50 years, ever since Ben Graham and Dave Dodd wrote Security Analysis, yet I have seen no trend toward value investing in the 35 years I've practiced it. There seems to be some perverse human characteristic that likes to make easy things difficult. The academic world, if anything, has actually backed away from the teaching of value investing over the last 30 years. It's likely to continue that way. Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace, and those who read their Graham & Dodd will continue to prosper."

The above comment was taken from a speech Warren Buffett gave at Columbia Business School May 17, 1984 marking the 50th anniversary of Security Analysis.

Discrepancies between price and value will make certain stocks undervalued at times or overvalued. The key is to invest in quality undervalued stocks. My mission is to teach you how to know when a stock is undervalued and when it is overvalued. The process is quite simple and easy to implement, even though people think that it needs to be complicated in order to make money. Forget conventional wisdom and use common sense, in my Simply Investing Course I teach you a few simple set of rules that are designed to make a you better investor. Take my online course today, and learn how value investors continue to prosper while the majority of folks continue to waste money on high-fee mutual funds.

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Showing 4 comments
  • S. B.

    Joel Greenblatt (and many others) say the reason value investing works is because it doesn’t work all the time. Because of the (relatively short) time periods that it doesn’t work, many people abandon value investing, thereby short circuiting the market efficiency that would otherwise result. That is why it continues to work.

    • kanwal

      Excellent point S.B. I truly believe that the markets are not efficient.

  • Dividend Gamer

    As an investor, you need to be able to stick to your guns, and stocks, during the hard times, to be rewarded during the great years.

    Have a clear plan, and continue to work to better understand what it is that you personally value, and how to improve your position.

    • kanwal

      I agree Dividend Gamer, the key is to remain patient and consistent over the long term.

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