Eighty-six years ago this week, the stock market hit its worst low. Today, with markets near all-time highs, things aren’t as different as you might think.
Then, as now, companies and investors were engaged in a massive power struggle. Then, companies were worth far more than investors thought — and would do almost anything to keep investors from unlocking the hidden value. Today, companies may be worth less than investors think — and are equally intent on preventing investors from noticing.
Read the rest of the column
This article was originally published on The Wall Street Journal.
Further reading
Howard M. Schilit, Jeremy Perler, and Yoni Engelhart, Financial Shenanigans: How to Detect Accounting Gimmicks and Fraud in Financial Reports
Charles W. Mulford and Eugene E. Comiskey, The Financial Numbers Game: Detecting Creative Accounting Practices
Jason Zweig, Your Money and Your Brain
Jason Zweig, The Devil’s Financial Dictionary
Benjamin Graham, The Intelligent Investor
Jason Zweig, The Little Book of Safe Money
Benjamin Graham, “Inflated Treasuries and Deflated Stockholders: Are Corporations Milking Their Owners?” (Forbes Magazine, June 1, 1932)
Securities and Exchange Commission, Regulation G (Conditions for Use of Non-GAAP Financial Measures)
1974 and 1999: History Turned Upside Down
A Note on Benjamin Graham
A Short History of Folly