How to Think Like Benjamin Graham and Invest Like Warren Buffett

SubjectIndex 265

Macroeconomic factors, 100, 103
Management discussion and analysis, 105–
106, 119
Managerial integrity and ability, 171–191
accounting and, 181–183
capital markets and, 186–187
corporate governance and, 172–176, 183–
184
information and, 188–189
key components of, 221–222
mergers and acquisitions and, 178–180,
184–186, 214–216
shareholder primacy and, 172–176, 180,
189–190
social responsibility and, 176–179
(See alsoChief executive officers)
Margin trading, 78–79, 80
Market bubbles, 8–10, 81–86
Market capitalization, 8–9
Market cycle, 69, 72
Market efficiency, 64
Market makers, transaction volatility and,
59–63
Market share, 83–84, 159
Market volatility, 5–8, 34
Matching expenses and revenues, 93–94
Materiality principle, 155, 160
Mergers and acquisitions:
accounting for, 154–155
defensive tactics in, 214–215
hostile takeovers, 178–180, 184–186, 214–
215
offensive tactics in, 212–214
Modern portfolio theory (MPT), 28–29, 64,
72
Momentum traders, 5, 21–22
Month effect, 11
Mutual funds, 99, 177

National Securities Markets Improvements
Act of 1996, 182
Negative information volatility, 52–59
accounting trickery and, 52, 153–167
pump-and-dump schemes, 56–58
rumor-based ‘‘news’’ and, 53–58
share repurchases and, 52, 216–217
Neoclassical economic model, 31
Net current assets, 137
Netherlands:
corporate governance and, 175
mergers and acquisitions, 185
News cycle, 53
Nile River Dam project, 35

Noah effect, 46–47

Noise theory, 25–28, 33–34

Non-Random Walk Down Wall Street, A(Lo

and MacKinlay), 25

Nonlinear systems, 31, 33–36

On-line brokers, 61

Opportunity cost, 77

Options, 79–81, 208–212, 216–217

Order flow, 60

Overconfidence, 117, 118

Owner orientation (seeShareholder pri-

macy)

Pattern seeking, 118

Perfect markets, 22–23

Phase portraits, 38–43

Phynance, 36–46

Point cycle attractors, 43

Ponzi schemes, 55

PPP approach, at Coca-Cola, 237, 241

Practical intelligence, at Coca-Cola, 241

Predictors, The(Bass), 37

Present value, 97–98

Price/boo kratio, 147

Price/earnings (P/E) ratio, 95–96, 148–149

Price/sales ratio, 147–148

Pricing discontinuity, 46–47

Pricing persistency, 46–47

Private Securities Litigation Reform Act of

1995, 190

Privatization, 184

Profit margin, 95, 126–128

Proxy contests, 203–204

Pump-and-dump schemes, 56–58

Q fever, 4–5

Quality of income, 131

Quic kMar ket Intelligence (QMI), at Gen-

eral Electric, 227

Quic kratio, 122–123

Random Walk Down Wall Street, A(Mal-

kiel), 12

Random wal kmodel, 17–22, 31

correlation tests and, 19–20

described, 12–13

Hexponent and, 35–36

perfect market and, 22–23

runs and, 20