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Subject: David Dodd

David LeFevre Dodd (August 23, 1895 – September 18, 1988) was an American educator, financial analyst, author, economist, professional investor, and in his student years, a protégé of, and as a postgraduate, close colleague of Benjamin Graham at Columbia Business School. He attended the University of Pennsylvania. [Wikipedia]

Post Modern Security Analysis

Moving beyond Graham & Dodd

A security analyst is like a detective.

Security Analysis is the study of facts about negotiable instruments for the purpose of determining whether a particular instrument is appropriate for a specific investor at a particular time and the intrinsic value of the security compared to its market price, if any.

The technique has evolved over time with the changing nature of information.

In the 21st century, with a flood of open source information and increasingly complex, global markets, new approaches are necessary.

Information technology

Fundamental analysis and the data tsunami

Technical analysis: massaging price and volume data

Whereas, in the days of Benjamin Graham, an analyst could count on Standard Statistics to provide the essential facts, three-quarters of a century later, this is no longer true in the case of its successor, Standard & Poor’s.

The tsunami of free financial information and increasingly complex markets, have driven up the cost of traditional security analysis. The less expensive route, technical analysis, is now favored by many. We must move beyond Graham & Dodd if fact-based analysis is to remain relevant.

Corporate governance

Business professor criticizes some buybacks

'Fight of Money Bags and Coffers' by Pieter van der Heyden

The Harvard Business Review (September 2006) featured a lead article by Professor Alfred Rappaport of Northwestern Univerity’s Kellog Graduate School of Management that questioned stock buybacks at prices above intrinsic value.

However, Professor Rappaport didn’t object to buybacks below intrinsic value, as had Benjamin Graham, Warren Buffett’s mentor and guru.

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Featured articles on inside pages

Stock buybacks

WSJ exposes the 9/11 caper

In a major exposé of misused executive options, the Wall Street Journal ran a front page article, reporting that as stocks sank after the the 9/11 attacks, scores of companies rushed to issue options to top officials. Some executives reaped millions.
More ...

Securities Analysis

Can index funds protect you against inflation?

Historical evidence suggests that equities do not offer fool-proof protection against inflation. Inflation brings high interest rates, confounds accounting practices, and is associated with bad government. More ...

US Politics

The decline of mainstream media

In September 2009, President Obama dominated television in his attempt to sell his government-run health plan, despite massive public opposition. Mainstream media has falling revenues and market share as people turn to unbiased sources. More ...

US equities

Stocks surge on spurious earnings

In Q1 2009, stock buybacks came back, driving up equity prices and sparking a rally by dominating a thin market. These equity repurchases were financed from depreciation reserves and bond issues. More ...

US Bonds

The collapse of the dollar and US bonds?

The extreme spending of the Obama government, combined with irresponsible bank lending policies promoted by Barney Frank and Chris Dodd, portend rising interest rates, the collapse of the bond market, and the end of dollar supremacy. More ...

World Economy

Signs of US losing its groove?

Thirty years ago, US income from abroad was more than double the amount of income that the US paid to the rest of the world. This year, or the next, this foreign income surplus may disappear forever. Is the US 'losing its groove'? More ...

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2011-02-23 13:21