J. V. Bruni and Company
1528 North Tejon Street
Colorado Springs, Colorado 80907
(719) 575-9880 or (800) 748-3409
J. V. Bruni and Company1528 North Tejon Street Colorado Springs, Colorado 80907 (719) 575-9880 or (800) 748-3409
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The Investor's Equation,
by William Bowen and Frank Ganucheau.  Starting in the
1930s, Benjamin Graham wrote extensively about what has come to be known
as "value" investing, and today his principles are broadly accepted
throughout the world. However, it wasn't always this way. During the
1960s and 1970s many investors, especially those who managed other
people's money, turned to "momentum" and "one decision" stocks. This
amounted to rank speculation, instead of a focus on what the authors
refer to as the "price paid [relative] to merchandise received." Amidst
the collapse of high price/earnings stocks (sometimes called the "nifty
fifty") in the mid 1970s there began a renaissance of value investing.
David Dreman, for example, was one of the first journalists to write
about the advantages of low P/E stocks in 1977. In Bowen and
Ganucheau's landmark 1984 book, the authors present a comprehensive
explanation of why low P/E investing should work and a detailed proof
that, in fact, it does. Indeed, the studies cited by the authors
represent one of the most powerful and convincing bodies of evidence
that one is apt to find, even to this day. Put differently, while
everyone has been told to "buy low and sell high," Bowen and Ganucheau
make investors' work easier by redefining the popular maxim as "buy low
P/Es and sell high P/Es." Nothing in life, including investing, is
quite this simple, but this informative book remains a very valuable one
for serious investors. |
"The Investor's Equation is an extraordinary accomplishment; it addresses some of the most troublesome obstacles to investment success, eliminates those impossible of solution, and builds a workable investing system." Financial Analysts Journal |