Graham Buffett Rhetorical Analysis

Decent Essays
Buffett is an advocate of Graham’s investing principles. He uses his purchase of Washington Post Company to illustrate those principles. Buffett and others estimated the intrinsic value at between $400 and $500 million while the market price was $100 million. The key thing that Buffett takes from Graham’s principles is the practice of buying good businesses at market discounts compared to the underlying value. A common misconception is that the market provides the most accurate price.
Buffett maintains the same buying principles whether it is a public or private company. In making a purchase, three things are considered: 1. Economic prospects 2. Management 3. Asking price. An actively traded business provides a good flow to evaluate. Buffett continues about Graham’s principles and discusses the market as an individual: Mr. Market. Mr. Market has emotional problems, some days are good and prices are high and other days are bad and prices are low, and it can fool you. Buffett uses this analogy to keep from being distracted by market analysis and trends. Buffett sticks by the principle of buying and holding. And talks about how the market is paradoxical and buyers should prefer lower prices so they can buy more.
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Buffett tries to play both sides. He tries be greedy when people are fearful and vice versa. He begins with talking about Berkshire shares about to be traded on the NYSE. He goes into talking about how new firms have to have 2,000 shareholders with 100 shares. However, Berkshire was granted an exception because 10 shares of Berkshire was much more valuable than any other 100 share value firm. This listing had no effect on their policies of selling. It actually helps stockholders reduce transaction costs. Buffett wanted to close the difference between the bid and ask price not increase the share price. As he stated earlier he wants to trade on a narrow range that stays around the intrinsic

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