Who is Benjamin Graham?

Study Notes:

Benjamin Graham was an influential value investor who changed the way the world looks at investing. His investment strategies are still used today and have been the foundation of many successful investors.

Graham was born in 1894 in London, and his family immigrated to New York when he was a child. He went on to earn his bachelor’s degree from Columbia University in 1914. After college, Graham began his career on Wall Street, becoming a partner at a brokerage firm by 1924. It was during this time that he began to develop his value investing philosophy, believing that stock prices were usually overvalued and that investors should look for stocks that were undervalued in relation to their intrinsic value.

He advocated for diversification and risk management, and wrote two books on investing, Security Analysis and The Intelligent Investor. These books have become some of the most influential works on investing and many of their principles are still relevant today.

Graham was also a mentor to a young Warren Buffett, who went on to become one of the most successful investors in history. Graham passed away in 1976, but his legacy lives on in the value investing principles he established.

What are 10 key points in Graham’s book The Intelligent Investor?

• Investing is most intelligent when it is most businesslike. This means investing with a long-term focus, paying attention to the fundamentals of the business, and avoiding the temptation of market speculation.

• Diversification is an important part of any intelligent investing strategy. Holding a variety of stocks and bonds in different sectors and industries is a sensible way to mitigate risk.

• Patience is key. Investing is a long-term endeavor and success requires patience, discipline, and dedication.

• Avoiding the common pitfalls of the markets is essential. These mistakes include buying high and selling low, buying on margin, and overpaying for investments.

• Stocks should be valued on their intrinsic worth, not on their market price. This means review the balance sheet, earnings, dividends, and other factors.

• Value investing is a proven strategy for long-term success. Look for stocks that are undervalued by the market and hold them until they reach their intrinsic value.

• Managing risk is an important part of any investing strategy. Risk management includes diversifying investments, setting stop-losses, and protecting against inflation.

• Investment decisions should be made with an eye towards the future and not just the present.

• Investing in yourself is just as important as investing in stocks and bonds. Investing in your education, health, and other personal assets is essential for a secure life and retirement.
• Having a financial plan is essential for long-term success. A financial plan should include goals, budgeting, and risk management.