investment approach outlined in Benjamin Graham and David Dodd's landmark book Security Analysis, initially published in the 1930s. They believed that investors should buy stocks with undervalued assets and that eventually those assets would appreciate to their true value in the marketplace.
fundamental investment approach outlined in Benjamin Graham and David Dodd's landmark book Security Analysis, published in the 1930s. Graham and Dodd founded the modern discipline of security analysis with their work. They believed that investors should buy stocks with undervalued assets and that eventually those assets would appreciate to their true value in the marketplace. Graham and Dodd advocated buying stocks in companies where current assets exceed current liabilities and all long-term debt, and where the stock is selling at a low Price/Earnings Ratio. They suggested that the stocks be sold after a profit objective of between 50% and 100% was reached, which they assumed would be three years or less from the time of purchase. Analysts today who call themselves Graham and Dodd investors hunt for stocks selling below their liquidating value and do not necessarily concern themselves with the potential for earnings growth.
