Graham and Dodd held prices differ from intrinsic value

Evidence

The successive editions of Security Analysis, written by Graham and his Columbia colleague David L. Dodd, taught that stocks and other securities had an “intrinsic value,” a value “which is justified by the facts, e.g., the assets, earnings, dividends, definitive prospects, as distinct, let us say, from market quotations established by artificial manipulation or distorted by psychological excesses” (Graham and Dodd 1940, pp. 20-21). Graham and Dodd admitted that there was no simple, rote way of determining what that intrinsic value was, but they believed that careful analysis could reveal cases in which a market price differed from any plausible estimate of intrinsic value. — Donald MacKenzie, An Engine, Not a Camera, 340

Categorization

• DEFINE: The intrinsic-value concept is foundational to value investing and sets up the later contrast with efficient-market theory.
• XREF: connects to: Financial asset prices reflect speculative circulation, not underlying real value — Max Haiven, Cultures of Financialization, 80; Share prices reflect guesses about others’ opinions, not intrinsic value — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 995

Broader Connections

• Share prices reflect guesses about others’ opinions, not intrinsic value #corroborates (0.80) — Yanis Varoufakis, Technofeudalism, 995
• Financial asset prices reflect speculative circulation, not underlying real value #corroborates (0.72) — Max Haiven, Cultures of Financialization, 80