Hey everybody this is Bill town this is Bill town this is Danielle town we're here for the invested podcast which is well what do we talk about we talk about rule one type investing which is well what do we talk about? We talk about rule one type investing which is

Warren Buffett Charlie Munger 101 deep value investing some people call it

deep value investing I haven't heard that one before. Yeah, it's kind of like

that different than value investing. Yeah, value investing is more bin Grahamish. If you want to read about value investing, the textbook is called Security Analysis, and Ben wrote it with his partner in the book called David Dodd, and they wrote it in 1934 and it is still available.

The book, the book is still available? Oh yeah not the guys they're dead.

They're not available for consulting so you have to read the book.

And it's sort of partner in explaining value investing is called

intelligent investor by Ben Graham wrote that one in 1949 and it is still in

print out there. And so that's the Bible on Value Investing. Value Investing.

Yep.

Value investing is defined by looking for very, first off it starts off completely in the teeth of modern portfolio theory.

Ben Graham didn't believe for a minute that everything was priced at its value.

So his view of the world was that you could find good businesses on sale and

and when you did you bought them really super cheap which means in single digit PE ratios that is you're buying them at some

small multiple of their earnings a lot of them didn't even have earnings and

you're buying them the way Ben Graham did at some small multiple of their cash that they had sitting in the bank.

And this is a real depression era, you know, World War II era strategy.

And the idea is that you buy a whole bunch of businesses that look like they're going to go bankrupt, and you buy like 200 of them.

He usually had about 200 at a time and you expect that some of them will go bankrupt but some of them won't and you make money

He had two hundred companies at a time. Yeah, he was not a lot more than the Warren Buffett style.

Exactly.

So what Buffett learned what Buffett learned from Ben Graham was essentially how to value a business, how to understand what the business is worth.

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