Thursday, 6 June 2013
A significant inaccurate notion - Equating a lower absolute share price automatically to a better value.
When Ben Graham was teaching his investing course at Columbia University in the 1950s, he used a brilliant form of instruction to illustrate relationship between price and value. He often took two consecutive securities from the stock tables and analysed the fundamentals. This method roved to be an effective tool for illustrating the price/value relationship. Of significant importance is the inaccurate notion that a lower absolute price automatically equates to a better value.