What Would Ben Graham Do Now?: A New Value Investing Playbook for a Global Age

8. Capability Deals in Theory

During the 18th and 19th centuries, it was the United States that was the emerging market. Nineteenth-century British and European investors viewed the U.S. as a large rising market, but also as a somewhat distant and daunting business and investment environment. Even though they did not use the term “emerging market,” business trades of that time are full of references to the “New World” and the “American frontier.” Other common descriptions include “violent,” “crude,” and “constantly spitting brown tobacco juice” (from British novelist Frances Trollope).

For investors, America’s rise in the 19th century to an advanced nation can be viewed as a process of European and British capabilities migrating into a large ...