tailieunhanh - The Intelligent Investor: The Definitive Book On Value part 21

The Intelligent Investor: The Definitive Book On Value part 21. The purpose of this book is to supply, in a form suitable for laymen, guidance in the adoption and execution of an investment policy. Comparatively little will be said here about the technique of analyzing securities; attention will be paid chiefly to investment principles and investors’ attitudes. We shall, however, provide a number of condensed comparisons of specific securities - chiefly in pairs appearing side by side in the New York Stock Exchange list in order to bring home in concrete fashion the important elements involved in specific choices of common stocks | 186 Commentary on Chapter 7 THE BARGAI N BIN You might think that in our endlessly networked world it would be a cinch to build and buy a list of stocks that meet Graham s criteria for bargains p. 169 . Although the Internet is a help you ll still have to do much of the work by hand. Grab a copy of today s Wall Street Journal turn to the Money Investing section and take a look at the NYSE and NASDAQ Scorecards to find the day s lists of stocks that have hit new lows for the past year-a quick and easy way to search for companies that might pass Graham s net-working-capital tests. Online try http quote. msection HighLow. To see whether a stock is selling for less than the value of net working capital what Graham s followers call net nets download or request the most recent quarterly or annual report from the company s website or from the EDGAR database at . From the company s current assets subtract its total liabilities including any preferred stock and long-term debt. Or consult your local public library s copy of the Value Line Investment Survey saving yourself a costly annual subscription. Each issue carries a list of Bargain Basement Stocks that come close to Graham s definition. Most of these stocks lately have been in bombed-out areas like high-tech and telecommunications. As of October 31 2002 for instance Comverse Technology had billion in current assets and billion in total liabilities giving it billion in net working capital. With fewer than 190 million shares of stock and a stock price under 8 per share Comverse had a total market capitalization of just under billion. With the stock priced at no more than the value of Comverse s cash and inventories the company s ongoing business was essentially selling for nothing. As Graham knew you can still lose money on a stock like Comverse-which is why you should buy them only if you can find a couple dozen at a time and hold them patiently. But on the very .