Notes 2519.Graham,Intelligent Investor,286.10.Buffett and Cunningham,Essays, 99.
11.The psychology literature calls the resistance bias a “principle of conservatism”
and the pattern-seeking bias a “representativeness heuristic.” Both labels seem
not only unwieldy but imprecise when adapted for thinking about investor be-
havior. Nevertheless, investment theorists cling to these terms in arguing that
these cognitive biases play a role in explaining market inefficiencies. For an
example, consider Andrei Shleifer,Inefficient Markets: An Introduction to Be-
havioral Finance(Oxford University Press, 2000).
12.Buffett and Cunningham,Essays,87.
13.Ibid., 53.
Chapter 8
1.Leopold A. Bernstein and John J. Wild,Analysis of Financial Statements(5th
ed. McGraw-Hill, 2000), 102–03.
2.Benjamin Graham,The Interpretation of Financial Statements(1st ed. 1937; rev.
ed. Harper Business, 1998), 32.
3.For more, consult ibid. or Lawrence A. Cunningham,Introductory Accounting
and Finance for Lawyers(2nd ed. West Group, 1999), on which this and the
next chapter draw (the title is intended to show that it is for the nonaccountant;
it is not exclusively for lawyers).Chapter 9
1.Benjamin Graham,The Intelligent Investor(1st ed. 1949; 4th rev. ed. Harper &
Row, 1973), 277.
2.Warren E. Buffett and Lawrence A. Cunningham,The Essays of Warren Buffett:
Lessons for Corporate America(The Cunningham Group, 1997), 101. Note also
Subrata N. Chakravarty, “Three Little Words,”Forbes, April 6, 1998.
3.Buffett and Cunningham,Essays,187.
4.The per share figures throughout this chapter do not take into account any
stoc ksplits occurring in 2000 or beyond.
5.Graham,Intelligent Investor, 14–15.
6.Michael Metz and David Kerdell, “Graham and Dodd Revisited,”PortfolioStrat-
egy(CIBC Oppenheimer, December 11, 1998).
7.Benjamin Graham,The Interpretation of Financial Statements(1st ed. 1937; rev.
ed. Harper Business, 1998), 15, 23.
8.Ibid., 49.
9.Ibid., 48–49.
10.Philip L. Carret,The Art of Speculation(1st ed. 1930; rev. ed. Fraser, 1984).
11.Graham,Intelligent Investor, 277–282.