5 ideas
About four years later he sold the lot for roughly four times his money, even though a number of the companies went to zero. The episode shows buying at the point of maximum pessimism, where a diversified basket of despised securities pays off because the few survivors rebound far more than the failures lose.
Benjamin Graham bought stocks priced below their net current assets, meaning cash, receivables and inventory minus all liabilities, ideally at no more than two-thirds of that figure. At that price the buyer is effectively getting the plant, the brand and future earnings for free.
Philip Fisher found outstanding growth companies by 'scuttlebutt', which means gathering information from competitors, suppliers, customers and former employees rather than relying on published figures. He judged management quality, research strength and the capacity for sustained sales growth. Once he found such a company, he held it almost indefinitely, because the compounding from a truly exceptional business outweighs the gains from trading in and out, and selling a great company to buy a merely good one is the costlier mistake.
T. Rowe Price held that companies, like people, pass through birth, growth, maturity and decline, and that the investor's profit lies in owning them during the growth phase. He looked for 'fertile fields', meaning industries with rising demand, and favored companies whose earnings reached new highs at each cyclical peak. He sold once growth began to decelerate into maturity, because at that point the market's high valuation no longer matches the company's prospects.
Set side by side, the masters' methods contradict one another: Graham's cheap balance-sheet bargains, Fisher's premium growth companies, Templeton's global contrarianism. Yet each succeeded. What they share is a consistent, clearly defined approach suited to the person's temperament and applied with independence and patience regardless of market mood. An investor's edge lies in mastering one coherent discipline and sticking to it, not in finding the one correct system.