What Has Worked in Investing is an attempt to share with you our knowledge of

historically successful investment characteristics and approaches. Included in this booklet

are descriptions of over 50 studies, approximately half of which relate to non-U.S. stocks.

Our choice of studies has not been selective; we merely included most of the major studies

we have seen throughout the years. Interestingly, geography had no influence on the basic

conclusion that stocks possessing the characteristics described in this booklet provided the

best returns over long periods of time. While this conclusion comes as no surprise to us, it

does provide empirical evidence that Benjamin Graham’s principles of investing, first

described in 1934 in his book, Security Analysis, continue to serve investors well. A

knowledge of the recurring and often interrelated patterns of investment success over long

periods has not only enhanced our investment process but has also provided long-term

perspective and, occasionally, patience and perseverance. We hope this knowledge will also

serve you well. Risk and return go hand-in-hand in investing; low risk generally means low expected returns, while higher returns are usually accompanied by higher risk. At the low-risk end of the spectrum are basic investments such as Certificates of Deposit (CDs); bonds or fixed-income instruments are higher up on the risk scale, while stocks or equities are regarded as riskier.