Benjamin Graham is widely regarded as the father of value investing, an investment strategy that involves buying stocks that are undervalued by the market. Born in London in 1894, Graham moved to the United States with his family when he was a child. He went on to attend Columbia University, where he earned a degree in economics.

Graham’s investment philosophy was based on the idea of buying stocks that were trading at a discount to their intrinsic value. He believed that by doing so, investors could minimize their risk and maximize their returns. Graham’s approach to investing was outlined in two books that he co-authored: “Security Analysis” (1934) and “The Intelligent Investor” (1949). These books are still considered to be among the most important works on investing ever written.

Early Life and Education

Childhood

Benjamin Graham was born as Benjamin Grossbaum on May 9, 1894, in London, England, to a Jewish family. His parents, Isaac M. and Dorothy Grossbaum, migrated to the USA when he was one year old, eventually settling down in New York City. The family changed their name from Grossbaum to Graham to assimilate into American society and avoid anti-Semitic discrimination.

Education

Graham attended Columbia University where he studied under famous economist and statistician, George E. Roberts. He graduated from Columbia in 1914 with a degree in business. After graduation, he worked for a time as a stenographer and a bond salesman before returning to Columbia to pursue a Master’s degree in economics.

While pursuing his Master’s degree, Graham was offered a teaching position at Columbia University. He taught economics and finance at the university for many years, where he became known for his conservative investment strategies and his emphasis on value investing.

Graham’s interest in finance and investing led him to write several books on the subject, including the seminal work “Security Analysis,” which he co-authored with David Dodd. The book is still considered a classic in the field of value investing and has influenced generations of investors.

Career

Benjamin Graham had a long and illustrious career in the world of finance and investing. He started as a clerk at Newburger, Henderson & Loeb, a Wall Street brokerage firm, in 1914. His analytical mind and work ethic quickly propelled him up the ranks, and by the age of 25, he had become a partner at the firm.

Graham-Newman Partnership

In 1926, Graham left Newburger, Henderson & Loeb to start his own investment partnership, Graham-Newman Corporation. This partnership was highly successful and provided Graham with the opportunity to invest in undervalued securities.

Teaching and Writing

In addition to his investment activities, Graham was also a successful teacher and writer. He taught at Columbia Business School and authored several influential books on investing, including “Security Analysis” and “The Intelligent Investor.” His teaching and writing helped to popularize the concept of value investing, which stresses the importance of buying securities that are undervalued by the market.

Investment Philosophy

Graham’s investment philosophy was based on the idea that the market is not always rational and that investors can find opportunities by looking for undervalued securities. He believed that investors should focus on the fundamentals of a company, such as its earnings and assets, rather than trying to predict short-term market fluctuations. Graham’s approach to investing has been highly influential and has inspired many successful investors, including Warren Buffett.

Overall, Benjamin Graham’s career was marked by a dedication to finding undervalued securities and a commitment to teaching others about his investment philosophy. His legacy continues to influence investors to this day.

Legacy

Benjamin Graham was a prolific writer, educator, and investor who left behind a lasting legacy in the world of finance. His ideas and principles have influenced generations of investors and continue to shape the way people think about investing today.

The Intelligent Investor

One of Graham’s most famous works is “The Intelligent Investor,” a book that has become a classic in the world of investing. In this book, Graham lays out his philosophy of value investing, which focuses on buying stocks that are undervalued by the market. He argues that investors should approach the stock market as a business owner, looking for companies with strong fundamentals and a long-term track record of success.

“The Intelligent Investor” has been widely praised for its clear and practical advice, and it remains a must-read for anyone interested in investing. The book has been updated and revised several times since its initial publication in 1949, but its core principles remain as relevant today as they were when Graham first wrote them.

Value Investing

Graham’s philosophy of value investing has had a profound impact on the way people think about investing. Value investing is based on the idea that the market is not always efficient and that investors can find opportunities by looking for undervalued stocks. This approach has been embraced by many successful investors, including Warren Buffett, who has often cited Graham as a major influence on his own investment philosophy.

Graham’s approach to value investing emphasizes the importance of fundamental analysis, which involves looking at a company’s financial statements and other data to determine its true value. He believed that investors should focus on buying stocks that are trading below their intrinsic value, rather than simply following market trends or trying to predict short-term price movements.

Influence on Warren Buffett

Perhaps the most famous legacy of Benjamin Graham is his influence on Warren Buffett, one of the most successful investors of all time. Buffett was a student of Graham’s at Columbia University and went on to work for Graham’s investment firm, Graham-Newman Corporation.

Buffett has often cited Graham as a major influence on his own investment philosophy, and he has described “The Intelligent Investor” as “by far the best book on investing ever written.” Buffett has also praised Graham’s emphasis on long-term thinking and his focus on buying stocks at a discount to their intrinsic value.

In many ways, Buffett has carried on Graham’s legacy, using his mentor’s ideas and principles to build one of the most successful investment portfolios in history. Today, Graham’s philosophy of value investing continues to inspire investors around the world, and his legacy as one of the greatest minds in finance remains secure.