COMMENTARY ON CHAPTER 17
The wisdom god, Woden, went out to the king of the trolls, got
him in an armlock, and demanded to know of him how order
might triumph over chaos. “Give me your left eye,” said the troll,
“and I’ll tell you.” Without hesitation, Woden gave up his left
eye. “Now tell me.” The troll said, “The secret is, ‘Watch with
both eyes!’ ”
—John GardnerTHE MORE THINGS CHANGE...
Graham highlights four extremes:
- an overpriced “tottering giant”
- an empire-building conglomerate
- a merger in which a tiny firm took over a big one
- an initial public offering of shares in a basically worthless com-
pany
The past few years have provided enough new cases of Graham’s
extremes to fill an encyclopedia. Here is a sampler:
LUCENT, NOT TRANSPARENT
In mid-2000, Lucent Technologies Inc. was owned by more investors
than any other U.S. stock. With a market capitalization of $192.9 bil-
lion, it was the 12th-most-valuable company in America.
Was that giant valuation justified? Let’s look at some basics from
Lucent’s financial report for the fiscal quarter ended June 30, 2000:^1
438(^1) This document, like all the financial reports cited in this chapter, is readily
available to the public through the EDGAR Database at http://www.sec.gov.