Book Review > Value Investing From Graham to Buffet and Beyond

The start of this book addresses the basic quest ion, "Does Value Investing Work?"
The answer is a resounding yes and an approach is described that you can use to determine this for your self from published market data.
The authors give an overview that covers a three phase process for guiding value investors. Firstly a search strategy to locate potentially rich areas, in which value investments may be located, is described. Secondly a powerful approach to valuation is shown, that avoids delusion. Thirdly a strategy for constructing an investment portfolio that reduces risk is presented.
The second chapter give strategies for "finding gold," while the following chapters get right into proper valuation. I found this very valuable because it showed the flaw in the application of the much used "discounted cash flow analysis."
A company's intrinsic value is established by looking at the reproduction costs of its assets, a companies earning power value, and how this applies when the company is a franchise. Growth investing is covered as a part of value investing.
The later section of this book tell how to construct portfolios to reduce risk, and the final section explores the distinctive approaches of eight value investors from classic, to mixed to contemporary.
The book is written in a clear style for those like me who are on a steep investment learning curve. It does however provide relish for the seasoned investor who may go directly to the examples to obtain examples of different approaches used by eight very successful investors.
I recommend this text to all who want to understand the value investing approach.