Security Analysis by Benjamin Graham and David Dodd was first published in 1934. It is a fundamental book for serious students of value investing.
In chapter 21, the authors reason the various aspects of investment management.Mr. Graham and Mr. Dodd think there is less substance to considering high-grade investments as permanent investments after seeing bad experiences during the depression area. There is supervision required at regular intervals. Given this issue, the authors discuss various alternatives. One is US Savings bonds. However, the income return is capped there. Second, being a speculative investor. However, the authors caution against such activities. The third alternative is through analysis of security that offers decent returns while having strong protection on the downside.
The authors suggest switching to a different investment if the prospects of the security under consideration have worsened. Additionally, having enough margin of safety to avoid loss in the worst-case scenario should be preferred.
The authors end the chapter with various sources through which a person with capital can get advice on the investment side.
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