Benjamin Graham : The Father of Value Investing
“The individual investor should act consistently as an investor and not as a speculator. This means.....that he should be able to justify every purchase he makes and each price he pays by impersonal, objective reasoning that satisfies him that he is getting more than his money's worth for his purchase.” Ben Graham“Most of the time common stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble... to give way to hope, fear and greed.” - Graham on Market Moods
"The one principal that applies to nearly all these so-called "technical approaches" is that one should buy because a stock or the market has gone up and one should sell because it has declined. This is the exact opposite of sound business sense everywhere else, and it is most unlikely that it can lead to lasting success in Wall Street. In our own stock-market experience and observation, extending over 50 years, we have not known a single person who has consistently or lastingly made money by thus "following the market." We do not hesitate to declare that this approach is as fallacious as it is popular." Graham on market Startegy
"The one principal that applies to nearly all these so-called "technical approaches" is that one should buy because a stock or the market has gone up and one should sell because it has declined. This is the exact opposite of sound business sense everywhere else, and it is most unlikely that it can lead to lasting success in Wall Street. In our own stock-market experience and observation, extending over 50 years, we have not known a single person who has consistently or lastingly made money by thus "following the market." We do not hesitate to declare that this approach is as fallacious as it is popular." Graham on market Startegy
Yes, I know I made you wait a lot to put forward the second article in the series of knowing about legendary Investors and their investing styles. In this article we are going to discuss about none other than the Guru of the Gurus, "Benjamin Graham". Yes, We are talking about the man who taught Investing skills to the most well known Investment Guru "Warren Buffet".
Childhood Struggles and the Natural InvestorBenjamin Graham was born in London in 1894, the son of an importer. His family migrated to America when Ben was very young and opened an importing business. They did not do well, Graham’s father dying not long after moving to America and his mother losing the family savings in 1907 during an economic crisis.Destiny had something else for this GeniusGraham was a star student. He managed to get to Columbia University and after graduation, offered a teaching post. However, destiny had somethign else in store for this genius and he took a job as a chalker on Wall Street with Newburger, Henderson and Loeb. It did not took him long when he began doing financial research for the firm and he became a partner in the firm.Learning the hard wayIn 1926, Graham formed an investment partnership with another broker called Jerome Newman. He also started lecturing at night on finance at Columbia, a relationship that was to continue until his retirement in 1956.The Crash of 1929 almost wiped Graham out but the partnership survived with the assistance of friends and the sale of most of the partners’ personal assets. Graham’s wife was forced to return to work as a dance teacher. Graham was soon back on his feet but he had learned valuable lessons . These lessons build the edifice for the greatest book to be ever written on Investment.The partnership between Graham and Newman continued until 1956 but never again lost money for its investors, earning an annual return of about 17 per cent.Security AnalysisIn 1934, Benjamin Graham together with David Dodd, another Columbia academic, published the classic Security Analysis which has never been out of print. Despite the crash, the book proposed that it was possible to successfully invest in common stocks as long as sound investment principles were applied. Graham and Dodd introduced the concept of ‘intrinsic value’ and the wisdom of buying stocks at a discount to that value. This books has been regarded as the "Bible " for the students of Investments for a decades. However this was just a beginning and the history had yet to unfold another gem written by benjamin.The Intelligent InvestorThe Intelligent Investor was published in 1949, is a widely acclaimed book on investing. Famous investor and billionaire Warren Buffet describes it as "by far the best book on investing ever written".Ben Graham taught investments for 28 years at Columbia University, and perhaps his success as a professional investor is matched by his success as an academic, which is most unusual. His published works have instructed many thousands of students and, indeed, his strength as an academic is derived from his many years experience on Wall Street.
Childhood Struggles and the Natural InvestorBenjamin Graham was born in London in 1894, the son of an importer. His family migrated to America when Ben was very young and opened an importing business. They did not do well, Graham’s father dying not long after moving to America and his mother losing the family savings in 1907 during an economic crisis.Destiny had something else for this GeniusGraham was a star student. He managed to get to Columbia University and after graduation, offered a teaching post. However, destiny had somethign else in store for this genius and he took a job as a chalker on Wall Street with Newburger, Henderson and Loeb. It did not took him long when he began doing financial research for the firm and he became a partner in the firm.Learning the hard wayIn 1926, Graham formed an investment partnership with another broker called Jerome Newman. He also started lecturing at night on finance at Columbia, a relationship that was to continue until his retirement in 1956.The Crash of 1929 almost wiped Graham out but the partnership survived with the assistance of friends and the sale of most of the partners’ personal assets. Graham’s wife was forced to return to work as a dance teacher. Graham was soon back on his feet but he had learned valuable lessons . These lessons build the edifice for the greatest book to be ever written on Investment.The partnership between Graham and Newman continued until 1956 but never again lost money for its investors, earning an annual return of about 17 per cent.Security AnalysisIn 1934, Benjamin Graham together with David Dodd, another Columbia academic, published the classic Security Analysis which has never been out of print. Despite the crash, the book proposed that it was possible to successfully invest in common stocks as long as sound investment principles were applied. Graham and Dodd introduced the concept of ‘intrinsic value’ and the wisdom of buying stocks at a discount to that value. This books has been regarded as the "Bible " for the students of Investments for a decades. However this was just a beginning and the history had yet to unfold another gem written by benjamin.The Intelligent InvestorThe Intelligent Investor was published in 1949, is a widely acclaimed book on investing. Famous investor and billionaire Warren Buffet describes it as "by far the best book on investing ever written".Ben Graham taught investments for 28 years at Columbia University, and perhaps his success as a professional investor is matched by his success as an academic, which is most unusual. His published works have instructed many thousands of students and, indeed, his strength as an academic is derived from his many years experience on Wall Street.
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