The Intelligent Investor: The Definitive Book On Value part 61. 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 | 586 Endnotes somewhat better than those of the Standard Poor s 500-stock composite and considerably better than those of the DJIA. 2. Personal note Many years before the stock-market pyrotechnics in that particular company the author was its financial vice-president at the princely salary of 3 000 per annum. It was then really in the fireworks business. In early 1929 Graham became a financial vice president of Unexcelled Manufacturing Co. the nation s largest producer of fireworks. Unexcelled later became a diversified chemical company and no longer exists in independent form. 3. The Guide does not show multipliers above 99. Most such would be mathematical oddities caused by earnings just above the zero point. Chapter 16. Convertible Issues and Warrants 1. This point is well illustrated by an offering of two issues of Ford Motor Finance Co. made simultaneously in November 1971. One was a 20-year nonconvertible bond yielding 7 2 . The other was a 25-year bond subordinated to the first in order of claim and yielding only 4 2 but it was made convertible into Ford Motor stock against its then price of 68 2. To obtain the conversion privilege the buyer gave up 40 of income and accepted a junior-creditor position. 2. Note that in late 1971 Studebaker-Worthington common sold as low as 38 while the 5 preferred sold at or about 77. The spread had thus grown from 2 to 20 points during the year illustrating once more the desirability of such switches and also the tendency of the stock market to neglect arithmetic. Incidentally the small premium of the preferred over the common in December 1970 had already been made up by its higher dividend. Chapter 17. Four Extremely Instructive Case Histories 1. See for example the article Six Flags at Half Mast by Dr. A. J. Briloff in Barron s January 11 1971. Chapter 18. A Comparison of Eight Pairs of Companies 1. The reader will recall from p. 434 above that AAA Enterprises tried to enter this business but quickly failed. Here Graham is
