In Buffett’s own word, ” I am 15% Fisher, and 85% Benjamin Graham”. Benjamin Graham, cowrote with David Dodd the two books, security analysis and the intelligent investor, which Buffett read as a teenager and it made a big impression on him.  The methodological approach to valuing security appealed to the mathematically minded young Warren Buffett.  Buffett sought out  and studied under his future mentor at Columbia Business School, and earned the only A Graham had ever given out to his class of security analysis.  Buffett later worked for Graham and continued to immerse in his teaching and approach to investing.

If Graham is the father of value investing, then Philip Fisher, a pioneer in growth investing, is largely responsible for any complimentary refinement to Buffett’s investment philosophy.  In Fisher’s book, common stock and uncommon profit, he proposed the best time to sell a stock is never, thus contributing to Buffett’s buy and hold forever preference, and Fisher stressed that to only buy the very best business, thus helping Buffett to refine his selection of only the best securities representing the greatest businesses. This has contributed to, I would say the extra 5-6% in annualized compounded rate of return in Berkshire Hathaway’s book value, in comparison to Ben Graham’s own value only portfolio of about 15% annualized compounded return.

© 2018 權傾天下 Tradeoptions4living Suffusion theme by Sayontan Sinha
Copy Protected by Chetan's WP-Copyprotect.