📖Benjamin Graham
Sell When Overvalued
Sell when price exceeds intrinsic value.
The investor should sell when his stock has risen to a level where the price no longer represents a bargain relative to its intrinsic value.
🏠 Everyday Analogy
📖 Core Interpretation
In Sell When Overvalued, Benjamin Graham focuses on the gap between price and value. Returns come from paying less than what a business is worth, not from guessing short-term market moves.
💎 Key Insight：Discipline in selling preserves gains and reduces risk.
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❓ Why It Matters
Ignoring valuation turns even good companies into poor investments. Overpaying compresses future returns and leaves little margin when assumptions are wrong.
🎯 How to Practice
Estimate intrinsic value with conservative assumptions, set clear buy ranges, and act only when price offers a meaningful discount with acceptable downside.
⚠️ Common Pitfalls
Confusing a low price with true cheapness
Using one metric without business context
Overly optimistic assumptions that erase margin of safety
📚 Case Studies
1
Net-Current-Asset Bargains (1934)
Graham invested in very small firms selling below net current asset value, often ignored by institutions.
✨ Outcome：Many such tiny companies liquidated or recovered, producing substantial gains and validating his preference for smaller, statistically cheap stocks.
2
GEICO Investment (1948)
Graham bought a large stake in relatively small, fast-growing insurer GEICO when it was still obscure.
✨ Outcome：GEICO became a much larger, highly profitable company, generating one of Graham-Newman’s best long-term returns and illustrating the payoff from smaller growth franchises.
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