2008-01-04 Value Investing: From Graham to Buffett and Beyond

I've read The Intelligent Investor as a starter into the world of investing and it is clear why this is considered the "Bible" of investing. But there was a problem for me: where do you find these undervalued businesses? And of course most undervalued businesses are low-priced for good reason.
So upon reading Value Investing I was happy to find that the authors also realised this dilemma and explained a valuation method that I found simple and sensible. As Buffet says: "It's better to be approximately right than exactly wrong." It's hard to predict the future with any investment, but I found this book was right on the money in terms of the underlying philosophy. It even shows how to...which I found refreshing.
For example, the authors explain how to value businesses three different ways, each based on where the business lies on the growth curve. From how to value assets -including what to leave in and what to leave out in your calculations- to how to run a Discounted Cash Flow projection, you can go deep in understanding a business. Like the Intelligent Investor before it, this book aims to take the speculation out of investing.
As a business owner myself, I also learned a lot about my own business, because after all you are investing in a business, not in bits of paper. Now I approach my own business as if it were an equities investment and I have found it a very useful approach because it sharpens how you apply your strategy to the markets you compete in.
The end result is I have been able to understand and price investments that actually work. The Intelligent Investor is essential background, but this book gives you a current perspective and blueprint without breaking any of the tenets put forward by the gurus Dodd and Graham.