The Intelligent Investor: The Definitive Book On Value part 57. 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 | 546 Appendixes rank number one in the Becker survey of pension funds for their size over the period of time subsequent to this conversion to the value approach. Last year they had eight equity managers of any duration beyond a year. Seven of them had a cumulative record better than the S P. All eight had a better record last year than the S P. The net difference now between a median performance and the actual performance of the FMC fund over this period is 243 million. FMC attributes this to the mindset given to them about the selection of managers. Those managers are not the managers I would necessarily select but they have the common denominator of selecting securities based on value. So these are nine records of coin-flippers from Graham-and-Doddsville. I haven t selected them with hindsight from among thousands. It s not like I am reciting to you the names of a bunch of lottery winners people I had never heard of before they won the lottery. I selected these men years ago based upon their framework for investment decision-making. I knew what they had been taught and additionally I had some personal knowledge of their intellect character and temperament. It s very important to understand that this group has assumed far less risk than average note their record in years when the general market was weak. While they differ greatly in style these investors are mentally always buying the business not buying the stock. A few of them sometimes buy whole businesses. Far more often they simply buy small pieces of businesses. Their attitude whether buying all or a tiny piece of a business is the same. Some of them hold portfolios with dozens of stocks others concentrate on a handful. But all exploit the difference between the market price of a business and its intrinsic value. I m convinced that there is much inefficiency in the market. These Graham-and-Doddsville investors have successfully exploited gaps between price and value. When the price of a stock can be .
