anomalies were not hard to find. In 1957 a list was published show-
ing nearly 200 issues of this type available in the market. In various
ways practically all these bargain issues turned out to be profitable,
and the average annual result proved much more remunerative
than most other investments. But they too virtually disappeared
from the stock market in the next decade, and with them a depend-
able area for shrewd and successful operation by the enterprising
investor. However, at the low prices of 1970 there again appeared a
considerable number of such “sub-working-capital” issues, and
despite the strong recovery of the market, enough of them
remained at the end of the year to make up a full-sized portfolio.
The enterprising investor under today’s conditions still has vari-
ous possibilities of achieving better than average results. The huge
list of marketable securities must include a fair number that can be
identified as undervalued by logical and reasonably dependable
standards. These should yield more satisfactory results on the
average than will the DJIA or any similarly representative list. In
our view the search for these would not be worth the investor’s
effort unless he could hope to add, say, 5% before taxes to the aver-
age annual return from the stock portion of his portfolio. We shall
try to develop one or more such approaches to stock selection for
use by the active investor.
34 The Intelligent Investor