Dear Mr. Buffett: What An Investor Learns 1,269 Miles From Wall Street

Chapter 9. Dead Man's Curve

	I evaluate the probable loss myself. I don't use a model.
	--Warren Buffett to Janet Tavakoli, September 2005

Benjamin Graham was not a fan of market timing, in which investors try to forecast stock market prices (or oil spreads, interest rate spreads, or prices of CDOs). He was sure those who followed forecasting would "end up as a speculator with a speculator's financial results."^[234] Instead, Graham advocated buying a stock if it was trading below its fair value and selling when it was above its fair value after doing a fundamental analysis. He knew that his views were "not commonly accepted on Wall Street."^[235] Even after Warren Buffett achieved a successful track record following (and then modifying) Graham's principles, many on Wall Street still did not accept these views.

A recent example is the demise of Bear Stearns, which was preceded and partly triggered by the deaths of Peloton, a European-based hedge fund cofounded by Ron Beller, and one of the funds of the Carlyle Group, a Washington-connected private equity firm. At the time of its demise, Peloton's held long positions of the type that Bear Stearns's research group touted in February 2008.

Ron Beller first made big headlines in 2004 when Joyti De-Laurey, personal assistant at Goldman Sachs to his wife, Jennifer Moses, went on trial and was convicted of forging the Bellers' and Moses' signatures to filch funds from their personal accounts. Beller and his wife asked De-Laurey to work for ...