Stock market ups and downs.... How to find the "ups" among the "downs" !

Hi Garth,

> Can you tell I think their is a lot of hype?

I agree that there's a lot of hype....

Before I started investing, I read very deeply about it for perhaps about a year. During this period, I came across an interesting university textbook about investing. (Unfortunately, I don't remember its name...)

In the textbook, they referred to a university study which was done on various methods of "stock picking." They analyzed most of the well-known techniques, like the Elliot Wave theory, technical analysis, etc., as well as the approach by Benjamin Graham.

(I think the study was done in the mid-1980s if I remember right, so no "Warren Buffett" approach was included, since none of the books about Buffett's approach which we have now had been published yet.)

They applied these approaches to the stock market for a period of a year or two, then checked their results. The results were stunning.

They found that *all* the approaches they tested did no better than throwing darts at a list of company names -- with the EXCEPTION of one method. That exception was Benjamin Graham's approach.

Benjamin Graham's approach is to look at undervalued stocks. Graham was also Warren Buffett's mentor, and Warren Buffett has described his own investment approach as 75% Benjamin Graham, and 25% Philip Fisher.

Anyway, when I read that, I stopped reading about other methods, and focused just on the Benjamin Graham / Warren Buffett approach to investment.

- Dien