Recently a friend recommended the book: "Value investing : From Graham to Buffett and beyond". In my humble opinion,Graham is for sure a value investor - buying what Warren Buffett calls the 'cigar butts' of businesses. Those investments had a couple of puffs of profits left in them and were essentially lying around for free. In the 1950's those were almost impossible to come by. And when you do that Graham did, you get a lot of not-so-good businesses to have to parse through.

The Warren Buffett mantra evolved into 'better a great company at a fair price than a fair company at a great price'. That is very different than what Graham teaches and not really 'value' investing. In fact, Warren Buffett rejects the "value investing" label. He's after growth at a value price - Coke comes to mind. But he's also happy with no growth. Bottom line for Buffett is that the business should be durable, simple to put a value on and can be sold. If you follow those three concepts without avoiding any of them, you'll destroy the investing market.

I enjoy being around people who make decisions by basing the decision on a specific set of values. Frankly, the Golden Rule is not a bad start for a value system. For example, if you follow the Golden Rule and you think it is wrong for someone to take what is yours then you wouldn't take someone else's stuff. We learned this stuff in elementary school. So that should be a basic Phil Town value, right? Don't take other people's stuff. Simple and basic RULE #1 stuff.

Which RULE #1 investing value do you like better? Well, some people like the show-me-the-money thing right up until its your stuff they are confiscating your stuff and you don't like it at all. You go for 'show money' by taking what isn't yours, you'll pay it back somehow because there is no free lunch. But I believe that in this world and the next, what goes 'round comes 'round. Find out more about RULE #1 Investing at http://www.philtown.typepad.com