The Intelligent Investor

Graham provides eight case studies to illustrate the different structures, policies, and performances of companies and their stocks. Each case study compares two companies with similar names. The first pair consists of Real Estate Investment Trust and Realty Equities Corp. of New York. He characterizes the former as “all that has been reasonable, stable, and generally good in the traditional methods of handling other people’s money” (446). On the other hand, he describes Realty Equities Corp. as a speculative operation with questionable management and overly ambitious expansion plans.

The second comparison features Air Products & Chemicals and Air Reduction Co. Graham explains that while both companies operate in the industrial gas industry, Air Products & Chemicals is the stronger contender with a growing market share and higher profit margins. The third case study concerns American Home Products Co. and American Hospital Supply Co. He characterizes them as “two ‘billion-dollar good-will’ companies” (453)—in other words, two companies with a significant amount of intangible power due to their reputations and brand names. He concludes that both have stock prices that are too high.

The fourth pair of companies are H & R Block Inc. and Blue Bell Inc. He describes Blue Bell as fighting steadily to become a leader in its industry, while H & R Block experienced rapid and significant growth.