Benjamin Graham

The Father of Value Investing. 1894 to 1976.

Who he was

Benjamin Graham taught at Columbia Business School and ran an investment partnership. He wrote Security Analysis in 1934 and The Intelligent Investor in 1949.

Warren Buffett was his student and later his employee.

The compounding lesson

Graham insisted on a margin of safety. Buying well below what a business is worth protects you when you are wrong.

Avoiding large losses is central to compounding. A 50% loss needs a 100% gain just to get back to even.

How he thought

He described the market as a manic business partner, Mr. Market, who offers you prices every day. You can ignore him or take advantage of him.

He also drew a sharp line between investing and speculating. Investing means analysis, safety and a reasonable return.

What to copy

Never pay more for an asset than it is worth. Treat volatility as an opportunity, not a danger.

Graham's own default advice for ordinary investors was a simple balanced portfolio, rebalanced regularly.