Benjamin Graham, the father of value investing, once said, “In
the short run, the market is a voting machine, but in the long run,
the market is a weighing machine.” In this quote, Benjamin Graham
was referring to the key difference between the “price” and the
“value” of a security.
In November 2006, Citigroup’s stock (NYSE: C) was trading at
$49.59. Following the credit crisis of 2007–2008 and by the end of
October 2009, Citigroup’s stock price had plummeted to...