A Businesslike Approach to Investing
Ben Graham once said that investing works best when it is most businesslike. In that spirit, I view my investing activities as identifying a collection of businesses whose assets sell for less than they are worth and are capable of remaining a going concern. To institute a margin of safety, I prefer companies where the liquidation value under reasonable circumstances will yield as much or more than I paid for the securities. I also want to generate cash flows wherever possible in the form of dividends or other cash payments. And I want time and price to be on my side to the greatest extent possible at all times.
I use every tool available to accomplish my goals. I have no restrictions on the capital structure of the business and I will buy common stock, preferred equity and even bonds if the margin of safety exists and they trade for substantially less than my calculation of value. In the past decade, I added options to my toolbox to improve my chances of long-term investment success. A solid grounding of option knowledge helps me as a value investor, and gives me an advantage when dealing in securities with a long-term perspective....733 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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