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The history of Value Investing


rukawa
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I've been thinking about this lately. The history of Value Investing. When did it begin and what has been its historical evolution.

 

Obviously the Newton of the field is Benjamin Graham. But what ideas were floating around that Graham used? I think a large amount of the original ideas of value investing come from two sources:

 

1) Bond investing which was more developed as a subject that equity investing. I think there was a very large bond investing book in Graham's time that he read.

 

2) SEC, Utility and regulatory/legal type reports early in the century. There was a lot of work by regulatory agencies to establish some concept of enterprise value. What fair value should you pay for a company. I think a large part of Graham's work was based on these principles established by regulators for various purposes.

 

But admittedly my understanding of this is hazy.

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The era was indeed different when value investing started to take shape.

The idea, at times, was to "investigate" firms because many would tend to under-report the value of their assets. Negative goodwill of sorts.

Here are a few links that are centered around Mr. Graham but that also provide some historical perspective.

The focus first was on bonds and maybe this has something to do with the margin of safety concept.

 

https://www.ivey.uwo.ca/cmsmedia/3065497/ben-graham-father-financial-analysis.pdf

http://www.valuewalk.com/wp-content/uploads/2014/06/bierig.pdf

http://www.grahamanddoddsville.net/wordpress/Files/Gurus/Benjamin%20Graham/2001%2001-13%20Graham%20-%20Forbes%20Greatest%20Investing%20Stories%2C%20Chapter%201.pdf

https://archive.org/details/principlesbondi01chamgoog

 

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