Benjamin Graham was Warren Buffett's mentor during his time at Columbia University, and Warren Buffett subsequently went to work for Graham as well. From time to time, Warren Buffett often references various aspects of investing that he learned while under the wings of Graham. According to Buffett himself, the one analogy he found to be the most useful from Graham's book - "The Intelligent Investor" is the concept of Mr. Market.
According to Graham, the stock market is a salesman that comes and offers you various quotes on the securities that you own. If he is feeling great that day, he might give you an amazing offer. If not, he might give you a lowball offer. The point is - you should never let the salesman's offer persuade you into thinking that your security is somehow more or less valuable. At the end of the day, the securities that you own have an intrinsic value and you should only do business with Mr. Market when it is favorable for you.
From Benjamin Graham himself:
> “The intelligent investor shouldn’t ignore Mr. Market entirely. Instead, you should do business with him- but only to the extent that it serves your interests.”
In these turbulent times in the market, it is important to recognize that simply because the market is up or down doesn't mean that your company's intrinsic value somehow changed. It is simply what the salesman is offering you today. Instead, you should be looking deeper into your company's revenue growth, valuation multiples, and other fundamental factors and whether your thesis around that has changed.
The mood of Mr. Market will often open up amazing opportunities in the equity market. In 10 years from now, we will be looking at many companies and saying "wish we had bought it in 2022". Don't let Mr. Market fool you.
Best of Luck to All!
First of all, I gotta say Aswath is incredibly talented teacher. Watching some of his videos seem like he’s the modern Benjamin Graham.
Thing is he is not exactly like that.
I’m not going against his methods or something, but tell me if I’m wrong, the amount of metrics, calculations, “side effects”, variables and formulas he takes into consideration while calculating intrinsic value is INSANE. I mean, contrary to warren buffett, which always repeatedly stated one should keep investing and valuations simple, Aswath looks like he takes valuations to some physic levels.
Friend of mine who reads Aswath’s books and watch his youtube classes kind of questions my reasons for reading “Security Analysis”, “intelligent investor” and so on. I was wondering what you guys think.
While many may argue that value investing doesn't make sense anymore, a lot of the rules and investment principles from Warren Buffett and Benjamin Graham stand the test of time, especially when you apply current nuance to their original investment rules (which are now close to a century-old)...
Disclaimer: The views below represent the opinions of the OP and are supported by research from Benjamin Graham's Security Analysis from 1934 and The Intelligent Investor from 1949, along with Google and Yahoo Finance and public statements from Warren Buffett and Benjamin Graham. These investment principles do not constitute investment advice, but rather are general principles one might employ in reaching his or her overall financial goals. All investing bears risk, including possible loss of capital.
#1 Create a healthy balance in your portfolio between risky and less risky investments
“Furthermore, a truly conservative investor will be satisfied with the gains shown on half his portfolio in a rising market, while in a severe decline he may derive much solace from reflecting how much better off he is than many of his more venturesome friends.” – quote from Benjamin Graham
A conservative investor may have 50% of his or her portfolio in risky assets like stocks and real estate and 50% in less risky investments like US treasury bonds (which you can buy either directly from the US Treasury or through ETFs like Charles Schwab Short Term Treasuries ETF (Ticker: SCHO) as well as through investments in gold (SPDR Gold Trust (Ticker: GLD)) which tends to be a good portfolio hedge against volatile markets and inflation (at least historically).
Benjamin Graham’s formula for calculating the percentage of assets that should be in risky vs. less-risky investments is to subtract your age from 100 and invest that percentage of your assets in risky investments (like stocks), with the rest in relatively safer assets like cash and gold. For instance, if you are 35 years old, you might invest 65% of your investible assets (not including savings) into risky assets like stocks and 35% of your investible assets in less volatile assets like cash (USD/euro or another stable currency) and gold. A 70-year-old, on the other hand, would only invest 30% (rather than 65%) of his or her assets in risky investments (like stocks) and the balance in more stable assets like cash (again, assuming the cash is in US dollar, euros or another relatively stable “low” inflation currency.)
... keep reading on reddit ➡
From "Value Investing: From Graham to Buffett and Beyond"
Someone suggested to fill in the boxes of the 3 slices of value with GEO's respective points. (summary of 3 slices here : https://capitalideasonline.com/wordpress/three-slices-of-value/)
I have done that below for visualization.
https://preview.redd.it/wzhhmbmlgwb71.png?width=771&format=png&auto=webp&s=5bbc45b93a5662dc0113d977899cc343deb7ac6e
Reproduction calculation: https://www.reddit.com/r/GeoGroup/comments/ogwy2l/geo_replacement_cost_at_least_5026share_but_even/h4lgl16?utm_source=share&utm_medium=web2x&context=3
Less liabilities, is really 10B.
Regarding Air/Conditioning: https://www.reddit.com/r/GeoGroup/comments/ol0v2f/3_hit_pieces_about_geo_today_they_are_getting/h5bez8g?utm_source=share&utm_medium=web2x&context=3
BI Incorporated contracts 5x'ing: https://www.reddit.com/r/GeoGroup/comments/ofxj6q/regarding_geo_government_contracts_and_bi/
Overcrowding :
https://www.reddit.com/r/GeoGroup/comments/oah9h8/existing_overcrowding_surging_violent_crime_45/
Other info found here : https://www.reddit.com/r/GeoGroup/comments/ogl7d6/quickstart_dd/
While many may argue that value investing doesn't make sense anymore, a lot of the rules and investment principles from Warren Buffett and Benjamin Graham stand the test of time, especially when you apply current nuance to their original investment rules (which are now close to a century-old)...
Disclaimer: The views above represent the opinions of the OP and are supported by research from Benjamin Graham's Security Analysis from 1934 and The Intelligent Investor from 1949, along with Google and Yahoo Finance and public statements from Warren Buffett and Benjamin Graham. These investment principles do not constitute investment advice, but rather are general principles one might employ in reaching his or her overall financial goals. All investing bears risk, including possible loss of capital.
#1 Create a healthy balance in your portfolio between risky and less risky investments
“Furthermore, a truly conservative investor will be satisfied with the gains shown on half his portfolio in a rising market, while in a severe decline he may derive much solace from reflecting how much better off he is than many of his more venturesome friends.” – quote from Benjamin Graham
A conservative investor may have 50% of his or her portfolio in risky assets like stocks and real estate and 50% in less risky investments like US treasury bonds (which you can buy either directly from the US Treasury or through ETFs like Charles Schwab Short Term Treasuries ETF (Ticker: SCHO) as well as through investments in gold (SPDR Gold Trust (Ticker: GLD)) which tends to be a good portfolio hedge against volatile markets and inflation (at least historically).
Benjamin Graham’s formula for calculating the percentage of assets that should be in risky vs. less-risky investments is to subtract your age from 100 and invest that percentage of your assets in risky investments (like stocks), with the rest in relatively safer assets like cash and gold. For instance, if you are 35 years old, you might invest 65% of your investible assets (not including savings) into risky assets like stocks and 35% of your investible assets in less volatile assets like cash (USD/euro or another stable currency) and gold. A 70-year-old, on the other hand, would only invest 30% (rather than 65%) of his or her assets in risky investments (like stocks) and the balance in more stable assets like cash (again, assuming the cash is in US dollar, euros or another relatively stable “low” inflation currency.)
... keep reading on reddit ➡