A Tribute to Benjamin Graham
Published by New York Society of Security Analysts on it's 60th anniversary.
The novelist Ernest Hemingway once wrote, “All modern American literature comes from one book by Mark Twain, called Huckleberry Finn.” In the world of investing, Benjamin Graham was no less important. In fact, he is considered the father of modern [fundamental] investing. Graham is to investing what Euclid is to geometry, and Darwin is to the study of evolution
Today, Euclid, Darwin and Twain are more recognized than Graham, Who was an investor and money manager, as well as writer, teacher, classical scholar, basement investor, playwright and financial philosopher. Yet almost all investors are in Graham’s debt – whether they have heard of him or not. As Smart Money magazine observed in 1994, precisely100 years after Graham was born, “Graham’s ideas formed a framework of thinking about the stock market that has inspired the investment community for nearly a century.”
Put into practice, his fundamentals allowed a generation of money managers to consistently achieve twenty per cent plus annual return. Over twenty years, his Graham-Newman Fund achieved 17% average annual return, as compared with the S&P 500’s +14% for the same period. Warren Buffett, Graham’s prize pupil, said, after Graham’s death, “It is difficult to think of possible candidates for even the runner up position in the field of security analysis.” Graham turned speculating into investing. He allowed stock pickers to be analysts – not fortune tellers, by devising coherent principles to analyze the fundamentals of a company- a road map to Wall Street – that are written out in the book he co-authored with David Dodd : Security Analysis.
George Goodman, more popularly known by his pen name Adam Smith, said that Graham had professionalized investing. “There is only one dean of our profession [if security analysis can be said to be a profession] …the reason that Benjamin Graham is the undisputed dean is that before him there was no profession and after him they began to call it that.”
His classic book The Intelligent Investor is a must read for every investor.
The novelist Ernest Hemingway once wrote, “All modern American literature comes from one book by Mark Twain, called Huckleberry Finn.” In the world of investing, Benjamin Graham was no less important. In fact, he is considered the father of modern [fundamental] investing. Graham is to investing what Euclid is to geometry, and Darwin is to the study of evolution
Today, Euclid, Darwin and Twain are more recognized than Graham, Who was an investor and money manager, as well as writer, teacher, classical scholar, basement investor, playwright and financial philosopher. Yet almost all investors are in Graham’s debt – whether they have heard of him or not. As Smart Money magazine observed in 1994, precisely100 years after Graham was born, “Graham’s ideas formed a framework of thinking about the stock market that has inspired the investment community for nearly a century.”
Put into practice, his fundamentals allowed a generation of money managers to consistently achieve twenty per cent plus annual return. Over twenty years, his Graham-Newman Fund achieved 17% average annual return, as compared with the S&P 500’s +14% for the same period. Warren Buffett, Graham’s prize pupil, said, after Graham’s death, “It is difficult to think of possible candidates for even the runner up position in the field of security analysis.” Graham turned speculating into investing. He allowed stock pickers to be analysts – not fortune tellers, by devising coherent principles to analyze the fundamentals of a company- a road map to Wall Street – that are written out in the book he co-authored with David Dodd : Security Analysis.
George Goodman, more popularly known by his pen name Adam Smith, said that Graham had professionalized investing. “There is only one dean of our profession [if security analysis can be said to be a profession] …the reason that Benjamin Graham is the undisputed dean is that before him there was no profession and after him they began to call it that.”
His classic book The Intelligent Investor is a must read for every investor.
