“Read Ben Graham and Phil Fisher, read annual reports, but don’t do equations with Greek letters in them.”
Ben Graham taught that you should only buy a stock when it is selling at a low price in relationship to its long-term value. The low price will give you a margin of safety against calamity. Phil Fisher said that you need to buy a high-quality company, then hold it for a long, long time and let the retained earnings build up the value. Warren took Ben’s “buy at a low price to get a margin of safety” and married it to Phil’s “buy the highest-quality company and hold it forever” and ended up with “buy high-quality companies at low prices in relation to their value and then hold them for a long, long time.” This is one of those equations where the sum is greater than its parts. Warren ended up making far more money than either Ben or Phil, who were the master investors of their day. As far as the equations with Greek letters in them are concerned, they are for the Wall Street types who didn’t get around to reading Ben and Phil.