Ben Graham Letter: Buying Insurance
By
J. Royden Ward, Analyst and Editor of
Cabot Benjamin Graham Value Letter From the March Cabot Benjamin Graham Value Letter 3/3/10
The bull market that began in March 2009 is nearing its birthday. We’ve enjoyed it, and we look forward to more, but how long it will last, we cannot tell. What we do know is that based on our valuation studies, the market remains well below its midpoint in our undervalue/overvalue range. The message, therefore, is that you should keep on investing, taking care as always to only buy when stocks are below their Maximum Buy Price.
Insurance stocks provide our opening combination this month; the fortunes of the industry are improving, and the two stocks we highlight in the Classic Benjamin Graham Value Model are great values.
Over in the Wise Owl Model, you’ll find some younger stocks, which are prospering from rapid advances in communications and Internet commerce. But you’ll also find bargains in big old well-managed companies.
Finally, there’s our Special Feature, which highlights six stocks that would pass muster for both Ben Graham and Warren Buffett. Stocks that pass this screen have brought excellent results in the past and we expect no less in the future. Just take care to build in diversification by buying as many of them as possible. Unexpected events occur, and diversification buys insurance.
Cabot Benjamin Graham Value Letter
Cabot Home Sign up for free Cabot Wealth Advisory e-newsletter Subscribers' comments on Cabot Benjamin Graham Value Letter