This timeless classic (first printed 1934) transcends business cycles, industry disruptions and investment fads. One example in the context of the recent real estate led market collapse is Ben Graham's views on Misleading Character of Appraisals (Ch 10, Specific Standards for Bond Investment, p 185):
During the great and disastrous development of the real estate mortgage - bond business between 1923 and 1929, the only datum customarily presented to support the usual bond offering - aside from an estimate of future earnings - was a state of the appraised value of the property, which almost invariably amounted to some 66' % in excess of the mortgage issue. If these appraisals had corresponded to the market values which experienced buyers of or lenders on real estate would place upon the properties, they would have been of real utility in the selection of sound real estate bonds. But unfortunately they were purely artificial valuations, to which the appraisers were willing to attach their names for a fee, and whose only function was to deceive the investor as to the protection which he was receiving.
...This whole scheme of real estate financing was honeycombed with the most glaring weaknesses, and it is sad commentary on the lack of principle, penetration, and ordinary common sense on the part of all parties concerned that it was permitted to reach such gigantic proportions before the inevitable collapse.
