The Unintelligent Investment? Gauging Facebook’s IPO Through the Lens of Graham and Dodd

As lawyers and regulators sift through the wreckage of the recent Facebook IPO, the media has been equally consumed with figuring out what went wrong and who was responsible for what was undoubtedly the most overhyped and mismanaged public debut of a company in decades. Amid the finger pointing, the timeless value investing principles espoused by Benjamin Graham and David Dodd seem more relevant than ever.

In 1934, Graham and Dodd wrote Security Analysis, a seminal work that is widely considered to be the “bible of value investing.” Graham’s The Intelligent Investor (1949), derived from his earlier collaboration with Dodd, targets the lay investor yet covers many of the same concepts first introduced in Security Analysis, including intrinsic value, margin of safety, and the distinction between investment and speculation. Read more.