What Would Ben Graham Do?

Investors should pay far more attention to the teacher than to the teacher's most successful student. Billionaire investor Warren Buffett's investing philosophy has deviated from the original methods taught by Ben Graham, as his enterprise has grown to a size that makes true cigar-butt, asset-based value investing less practical. Much is made of Buffett learning more of a Phil Fischer-like approach from partner Charlie Munger, but the truth is Buffett would have had to develop along that path even if he never met Munger. He had too much money under management for a hardcore value approach to be practical.

That is a problem I do not have, thankfully. I can still focus on the approach learned in the Columbia University classroom that gave birth to what we now know as value investing. Different practitioners of the art have taken it different directions over the decades, but I still prefer the basic buying of assets and, secondarily, earnings at a very low price. I also heed Graham's advice to benefit from price rather than try to predict market movements. Market movements are important in that they change the relationship between the business value of an enterprise and the current market quotation. It is the price of the individual securities rather than the current level of the averages that matters most....518 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.