The Intelligent Investor: The Definitive Book On Value part 4. 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 | 16 Commentary on the Introduction After his Amerindo Technology Fund rose an incredible in 1999 portfolio manager Alberto Vilar ridiculed anyone who dared to doubt that the Internet was a perpetual moneymaking machine If you re out of this sector you re going to underperform. You re in a horse and buggy and I m in a Porsche. You don t like tenfold growth opportunities Then go with someone else. 6 In February 2000 hedge-fund manager James J. Cramer proclaimed that Internet-related companies are the only ones worth owning right now. These winners of the new world as he called them are the only ones that are going higher consistently in good days and bad. Cramer even took a potshot at Graham You have to throw out all of the matrices and formulas and texts that existed before the Web. . If we used any of what Graham and Dodd teach us we wouldn t have a dime under management. 7 All these so-called experts ignored Graham s sober words of warning Obvious prospects for physical growth in a business do not translate into obvious profits for investors. While it seems easy to foresee which industry will grow the fastest that foresight has no real value if most other investors are already expecting the same thing. By the time everyone decides that a given industry is obviously the best money at him flinging more than 100 million into his fund over the next year. A 10 000 investment in the Monument Internet Fund in May 1999 would have shrunk to roughly 2 000 by year-end 2002. The Monument fund no longer exists in its original form and is now known as Orbitex Emerging Technology Fund. 6 Lisa Reilly Cullen The Triple Digit Club Money December 1999 p. 170. If you had invested 10 000 in Vilar s fund at the end of 1999 you would have finished 2002 with just 1 195 left-one of the worst destructions of wealth in the history of the mutual-fund industry. 7 See funds smarter . Cramer s favorite stocks did not go higher consistently in good days and bad.
