The Intelligent Investor: The Definitive Book On Value part 52. 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 | 496 The Intelligent Investor change be made by the public utilities despite its adverse effect on the . Treasury because we are convinced that it is completely inequitable to impose a second personal income tax on earnings which are not really received by the shareholders since the companies take the same money back through sales of stock. Efficient corporations continuously modernize their facilities their products their bookkeeping their management-training programs their employee relations. It is high time they thought about modernizing their major financial practices not the least important of which is their dividend policy. The administration of President George W. Bush made progress in early 2003 toward reducing the problem of double-taxation of corporate dividends although it is too soon to know how helpful any final laws in this area will turn out to be. A cleaner approach would be to make dividend payments tax-deductible to the corporation but that is not part of the proposed legislation. COMMENTARY ON CHAPTER 19 The most dangerous untruths are truths slightly distorted. -G. C. Lichtenberg WHY DID GRAHAM THROW IN THE TOWEL Perhaps no other part of The Intelligent Investor was more drastically changed by Graham than this. In the first edition this chapter was one of a pair that together ran nearly 34 pages. That original section The Investor as Business Owner dealt with shareholders voting rights ways of judging the quality of corporate management and techniques for detecting conflicts of interest between insiders and outside investors. By his last revised edition however Graham had pared the whole discussion back to less than eight terse pages about dividends. Why did Graham cut away more than three-quarters of his original argument After decades of exhortation he evidently had given up hope that investors would ever take any interest in monitoring the behavior of corporate managers. But the latest epidemic of scandal-allegations of managerial .
