The Code is the Design

  [From the archives] How do I use GV? What are Graham's calculations for stocks? Please see Graham's calculations and GV. Who is Benjamin Graham? Benjamin Graham was the teacher and mentor of the World's most successful investors, including Warren Buffett. Buffett even named his son after Graham, and has said he considers Graham his second greatest influence, after his own father. Buffett attributes his success almost completely to Graham's teachings, the central principle of which Graham called The Margin of Safety . (Read more about Graham's timeless principles). What does GV do? GV is the first financial portal in the World that applies Graham's calculations for stocks to the entire stock market (for American stocks, all 4000 NYSE stocks in the S&P Total Market Index). So instead of a few specific stock recommendations, GV gives you a verifiable list of ALL stocks meeting the Graham standards, calculated at their latest price. For more in...

  Possibly one of the most common misconceptions in the world of investing is that higher risks equal higher rewards, and consequently that younger people can afford to take higher risks. While high-risk-high-reward might be viable in a one-time transaction, it is not a long term strategy. It is a simple matter of probability and mathematics. Over the long term, continuous high risk will inevitably lead to disaster. Thus the first and foremost principle for any sensible long term investor is safety of the principal amount. Like any other business, there are no long-term profits in stocks without safety. For those looking for a quick short-term profit, race courses and casinos will probably make more sense than the stock market. Horses and cards might be hard to predict but in the short-term, the stock market is downright impossible. You might as well have some fun risking your money. There is also a common misconception that stocks are risky while other investments...

How to start investing? Calculations for stocks. The first question we ask ourselves once we decide that we want to invest in stocks is - where to begin? Friends will offer advice, brokerage houses will make recommendations and various other mediums publish a constant stream of stock research. The problem is that finance is a very complex field in which anyone can get offer an opinion and make profits during a few good years, but very few actually survive the bad years when they strike unexpectedly. Also, almost anything else you buy has to pass standard safety tests, but not financial products. This confusion over safety standards is largely because the safety of a financial product implies profitability, and is a factor of its price, which is constantly changing. Lastly, there is the common misconception that higher risks equal higher rewards. High-risk-high-reward is never a viable long-term strategy. It is simply a matter of mathematical probability. Over time, con...

  There are two very distinct tribes within the world of finance, a distinction that is not very apparent at first. The first are the people who actually invest their own money and try to make a profit for themselves. The second are the people who play with OTHER people's money, usually from the first group, and earn their income from commissions from trades and by offering stock advice. While the two fields might seem similar, as an investor, it's very important to be aware of this distinction. There are honest and dishonest people in both groups. A lot of people work in both, investing other people's money as well as their own. But the majority of stock market advice, recommendations and research originates from the second group - the players and the advisors. Note that this group actually takes no major risks on its own, except for the minor ones to their jobs and reputations which can easily be replaced. They don't lose their fortunes and life's savi...

  The core principles of Benjamin Graham can be summarized thus: A stock is a legal share in a business or corporation. A stock is a legal share in a business or corporation, and all its profits and assets. By owning a share, you legally own a piece of a running, working company Stocks are the most liquid and the most profitable of all investments (note that the highest average annual returns expected from stocks is 25-30%, even by the world's most successful investors). The assets of a company are not only growing in value, but are also working to generate profits. For this reason, ignoring short-term fluctuations, stocks have consistently proven to be the most profitable of all investments . Owning a good stock is thus no different from owning any other asset like land or gold, just more profitable. Book Value (BV) and Earnings per Share (EPS) are both important important for evaluating a stock. Each company is divided in a different way. Book Value or BV is the val...