Warren Buffett and Ben Graham gave birth to “value” investing by studiously spending hours upon hours digging and sifting through piles of paperwork to find that nugget— that little golden “ah-ha” nugget—and that’s because value investing does work.
Yes, uncovering every last valuation “fundamental” does work for a group of investors called “institutional investors” because institutional investors already have billions of dollars to throw around.
They may also have five Harvard grads with their noses in every financial document a company may have, and they are bound to uncover something that determines a possible gold mine. For you, all that information is irrelevant.
For you and me, it’s about making money, not about being smart or being right. Remember the commentary in chapter 1? We said that institutions move markets and make trends—not you and not me.
Therefore, we will follow the lead and the lead is always price movement. I’m not completely against knowing things about the companies of the stocks I trade, like what they do and how they do it. I am a business junky and I do like to find out more details about a company, but that information rarely goes into buy or sell decisions.