 It has become formulaic that when a movie comes out one of the advertisements will feature reviewers comments like “riveting”, or “one of the must see movies of the year” and of course my favorite “an instant classic”. The point, obviously, of these reviews is to convince you, based on some other expert’s testimony, that you need to see this movie.
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 Executive Compensation is a touchy subject. Some believe executives should be compensated in relation to share price. Others feel that an executive should derive their satisfaction from the growth of their business and not from pulling down a massive salary. Buffett for one is a huge proponent of this approach. He pays himself a comparably paltry $100K salary per year and several of the businesses owned by Berkshire have CEOs who share this same compensation package.
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 I am willing to concede that company insiders know more about their businesses than I could ever learn about it by reading financial statements. This is why I use insider trading as part of my assessment critieria. The fact that all company insiders are not created equal should come as no surprise- who would you trust to know more about a business, the chief accountant or the janitor?
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 Does the market price of a stock play a significant role in your decision to buy, or not buy shares in a company? For me the answer to this question has always been no, I look at rate of return and give almost no credence to stock price. If I invest $100K in a company it is of little interest to me if I get 5 stock or 500 stock in this company as long as I see a return on my initial investment. I have a good friend who will only buy a stock if it is trading for under $5. Are there advantages to his system?
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 To follow up our Graham intro we will investigate Graham’s first insurance technique of buying on the cheap. Graham used a number of ratios to determine if a company is cheap. The first ratio we need to look at is the Price/Earnings ratio.
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