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Ben Graham on counting good management twice


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I'm reading Security Analysis (1940 edition) for the first time (I'm a young investor, what can I say  ;D), and there are so many gems, but here's one that I liked and want to share:


There is a strong tendency in the stock market to value the management factor twice in its calculations. Stock prices reflect the large earnings which the good management has produced, plus a substantial increment for "good management" considered separately. This amounts to "counting the same trick twice" and it proves a frequent cause of overvaluation.
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