From the Inside Flap
Although the questions have remained the same, the ways to answer them have changed. A Modern Approach to Graham and Dodd Investing examines the classic Graham and Dodd approach to valuation and updates it for the twenty-first century. Thomas Au, a portfolio manager with a leading insurance company and exValue Line analyst, reworks the basics of value investing from net present value, financial statement analysis, and return on capital to return and leverage, asset allocation, and diversification.
Before learning about the modifications to Graham and Dodds principles of value investing, youll be introduced to some basic investment concepts and mathematical measures for the calculation of investment returns. From therealthough the focus of the book is on stocksyoull first become familiar with bonds, because an understanding of the risk and return characteristics for bonds underpins an understanding of those for equities.
Recent examples, including Enron and WorldCom, are introduced throughout these pages, to illustrate exactly how you can use this updated approach to your advantage. Topics explored in this comprehensive book, include:
Part I: Basic Concepts
Part II: Fixed Income Evaluationbills, notes, bonds
Part III: Equity Evaluationcash flows, capital expenditures, asset value, dividends, earnings
Part IV: Special Vehicles for Investmentmutual funds, international investing, real estate
Part V: Portfolio Managementasset allocation, modern theories vs. Graham and Dodd
Part VI: Some Contemporary Issuesthe Dow, excessive credit creation, generational cycles in the American stock market
A Modern Approach to Graham and Dodd Investing examines the changes that have taken place in the financial world since the days of Graham and Dodd, and reveals the necessary modifications you must make in order to apply these value investing principles in todays markets. Filled with in-depth insight and practical advice, this valuable resource offers an updated form of Graham and Dodd that will help you face todays market realities.