Re: An example of why there is money to me made in the stock market
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Warren Buffet bought the Washington Post Co. you could have sold the companies entire assets and it would have been worth more than what he paid if he bought all the shares.
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I think your example is apt, but underpriced securities aren't trivial to find. The saying goes, the market is frequently efficient, but not always so. Finding those situations where it isn't takes elbow grease and patience.
When the washington post got so cheap, it was during a terrible bear market and investors didn't know where the bottom was. They were also scared by the high level of family ownership and control. Warren's genius was that (unlike most fund managers), he was ecstatic if the stock price declined further after his purchase, as it offered him the opportunity to buy more at even better prices. And he judged the Grahams as good managers who treated their minority shareholders fairly, so their majority control wasn't a concern.
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