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Technology Stocks : Intel Strategy for Achieving Wealth and Off Topic
INTC 37.06-6.2%3:59 PM EST

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To: Sonny McWilliams who wrote (26805)2/26/2001 3:37:20 PM
From: William Hunt  Read Replies (1) of 27012
 
Sonny ---something to tuck away for reference :
INVESTING 101

Words of wisdom from Benjamin Graham, the so-called father of value investing, most widely known now as the guru of legendary U.S. investor Warren Buffett. Here are a few tips from his preachings:

- Be an investor, not a speculator. Buy only at prices amply supported by underlying value. Reduce holdings when the investment enters the speculative phase.

- "An investment operation is one which, on thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative." (From Graham's classic book Security Analysis)

- Know the asking price. Multiply the company's share price by the number of shares. If you were to buy the whole company, would it be worth that much?

- Scour for bargains. Graham's net current asset value formula subtracts all liabilities from current assets. Buy below that value, per share.

- Be suspicious of corporate figures. It's a company's future earnings that drive its share price higher but projections are based on current numbers. Current earnings are often manipulated by creative accountancy. Read the footnotes to financial statements.

- Diversify. Investors should always have, according to Graham, a minimum of 25 per cent of their portfolios in bonds or bond equivalents and 25 per cent in common stocks. The other 50 per cent can be divided between the two types of investments depending on price. When stocks are high, sell them and buy bonds. When stocks fall, sell bonds and buy stocks at bargain prices.

- Stick to quality. Companies with good earnings, solid dividend histories, low debt and reasonable price-earnings ratios are best.

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