The interview was recorded in 1977. Certainly not a time when Mr. Market was the most chearful chap on the block. Nevertheless, did Jerald make the case for buying low P/B stocks in that challenging stock market environment.
I am pretty impressed by this man I've never heard of before. If we had such kind of brokers today, brokerage firms would even be able to grap some business from me.
Key Points Made:
- Concentrates on the balance sheet approach to investing
- Buy stocks like groceries and not like perfume
- Is a follower of Benjamin Graham. Those following the Graham approach, todays market (1977) is for an investor like being a kid in a candy store. Over 45% of the companies listed on the NYSE are trading below book value
- Buys at deep discount to book until close to book. Sells around 1,5 time book value
- He's witnessing what he calls a lop-side of market: On the one end fine American corporations selling at signifianct discount to book value, and on the other end companies selling at 6-7 times book value. Sees great risk in buying those latter stocks
- Likes buying companies valued around their net- working capital, which unfortunately becomes harder and harder to find
- Approach he recommends to its clients requires patience and sometimes you invest too early. But the margin of safety protects his clients to the downside
- Looks for dividend paying stocks. Makes waiting more bearable
Jerald
Kiernan suffered a cardiac arrest in January 1992 during which he
experienced acute oxygen deprivation to the brain. - See more at:
http://caselaw.findlaw.com/us-8th-circuit/1306508.html#sthash.hn6CD86C.dpuf
Jerald
Kiernan suffered a cardiac arrest in January 1992 during which he
experienced acute oxygen deprivation to the brain. - See more at:
http://caselaw.findlaw.com/us-8th-circuit/1306508.html#sthash.hn6CD86C.dpuf
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