The value of market esoterica to the consumer of investment advice is a different story. In my opinion, investment success will not be produced by arcane formulae, computer programs or signals flashed by the price behavior of stocks and markets. Rather an investor will succeed by coupling good business judgment with an ability to insulate his thoughts and behavior from the super-contagious emotions that swirl about the marketplace.
At this point, when treasury bills, seven day treasury bills at 1/20th of one percent, it's not because people want to earn 1/20th of one percent, it's because they trust the fact the treasury will give it back to them next week.
There are three important principles to Graham's approach. [The first is to look at stocks as fractional shares of a business, which] gives you an entirely different view than most people who are in the market. [The second principle is the margin-of-safety concept, which] gives you the competitive advantage. [The third is having a true investor's attitude toward the stock market, which] if you have that attitude, you start out ahead of 99 percent of all the people who are operating in the stock market - it's an enormous advantage.
In our view, though, investment students need only two well-taught courses-How to Value a Business, and How to Think about Market Prices. Your goal as an investor should simply be to purchase, at a rational price, a part interest in an easily-understandable business who's earnings are virtually certain to be materially higher five, ten and twenty years from now.
I would rather sustain the penalties resulting from over-conservatism than face the consequences of error, perhaps with permanent capital loss, resulting from the adoption of "New Era" philosophy where trees really do grow to the sky.