How To Think Like Benjamin Graham and Invest Like Warren Buffett

A Commonsense Investing Approach that Combines 21st Century Technology with the Market-Proven Strategies of Benjamin Graham and Warren Buffett

Praise for Lawrence Cunningham's straight-talking analysis:"A much-needed work on a unique style of investing, this book puts the ABCs of common sense valuation back into the business of investing. This is the place to look for insight and guidance in the age of volatile markets and colliding ideas."

"Anyone desiring to be a successful investor should read this excellent book presenting the important investing principles of Graham, Buffett, Fisher, and others in a most insightful and understandable manner."

"Remarkably timely. For stock players who realize they played the greatest fool in the Internet stock game, Cunningham offers a tool for rehabilitation: a guide to thoughtful investing. For earnest investors, he shows how to live profitably with the moodiness of Mr. Market."

"While the stock market does not always behave rationally, Larry Cunningham's well-articulated and insightful views as to value investing are a refreshing reminder that, just as night follows day, a return to the principles at the core of Cunningham's common sense approach to investing is inevitable."

"Lawrence Cunningham explains, then debunks, most of today's acronyms, buzz words, and pop investing concepts. He gets down to the fundamentals that investors must know about companies in order to choose reliable winners in the stock market."

"Following the herd may seem rational and intelligent—until it stampedes straight off the cliff."

Lawrence Cunningham possesses one of today's clearest, most distinct voices on the inherent irrationality of investors and the stock market. Renowned for his no-nonsense style and straightforward approach, he is also renowned for telling independent investors—better than any other market observer—how and where to find uncommon values in virtually any market environment.

In How to Think Like Benjamin Graham and Invest Like Warren Buffett, Cunningham returns to the basics—by returning to the two legends who established, and then refined, those basics. He shatters many of today's common investing myths, replacing them with the facts and tools needed to thoroughly analyze the investment value of any business.

This remarkable book illustrates how forces that are unique to today's market—including electronic day trading, an overvalued IPO market, and computer-based stock exchanges—are leading to an increasingly wide gap between price and value. It then convincingly explains how to close that gap, and find underpriced stocks poised to recover their value, by using the business analysis approaches and insights of Benjamin Graham and Warren Buffett.

In a sophisticated but readable style, How to Think Like Benjamin Graham and Invest Like Warren Buffett discusses how to understand and apply the time-proven tenets of value investing:

• How to value a business—with valuation examples from top companies including GE, Microsoft, Amazon.com, and others
• How to rate business managers—a key to finding quality long-term investments
• How to know when management is playing with numbers—and understand the games they play

Unlike any financial book you have ever read, How to Think Like Benjamin Graham and Invest Like Warren Buffett wraps a lifetime of investing wisdom into one compelling, insightful, and highly accessible package. An intelligent guide to accurately analyzing and realistically valuing investment targets, it will tell you what questions to ask, what answers to expect, and how to approach every stock as an experienced, skeptical, and commonsense business analyst.

Contents

Part I: A Tale of Two Markets.

Chapter 1: Mr. Market's Bipolar Disorder.

Chapter 2: Prozac Market.

Chapter 3: Chaotic Market.

Chapter 4: Amplified Volatility.

Chapter 5: Take the Fifth.

Part II: Show Me the Money.

Chapter 6: Apple Trees and Experience.

Chapter 7: Your Circle of Competence.

Chapter 8: Recognizing Success.

Chapter 9: You Make the Call.

Chapter 10: Making (Up) Numbers.

Part III: In Managers We Trust.

Chapter 11: Going Global.

Chapter 12: Rules and Trust.

Chapter 13: Directors at Work.

Chapter 14: The Fireside CEO.