Warren Buffett has said the second most important man in his life, after his father, was Benjamin Graham, who is also known as the father of securities analysis and even wrote the definitive first work on the subject, appropriately titled Security Analysis.  He believed in the exhaustive analysis of financial statements, including detailed study of all footnotes.  Trendlines in earnings-per-share or liquidity ratios, for example, were vital in understanding any and every stock.  He was strictly “bottoms-up,” painstakingly building a portfolio one stock at a time.

Graham died in 1976 but must be rolling over in his grave (whatever that means?), when he observes modern day stock market movements, where the market rises or falls by hundreds a point in a day, simply because of what some bureaucrat says.  The market has been treading water for days, waiting for today’s Congressional testimony by Fed Head Janet Yellen.

If she is modestly optimistic, like Ben Bernanke, then the market will rally modestly.  If she is modestly pessimistic, then the market will sink badly.  The market is primed to hear only good news.

And, she will not mention corporate balance sheets, income statements, earnings-per-share, or corporate revenue projections.  Not even once!  Benjamin Graham would feel like Alice in Wonderland.