On Benjamin Graham

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On Benjamin Graham There is a reprint of the 1949 classic “The Intelligent Investor“, which carries a short life-sketch of Benjamin Graham. It is well worth reading. BENJAMIN GRAHAM was born in 1894 in London. Upon migration to America, his father started an importing business-unfortunately, he died shortly thereafter, and the business failed. More bad news was to follow when an economic crisis in 1907 resulted in the loss of the family savings. Through hard work, Graham, a bright student, enrolled in Columbia University and was offered a teaching position there upon graduation. However, he chose instead to take a job as a chalker on Wall Street with the firm Newburger, Henderson and Loeb. Recognizing his innate skills, he was soon made a financial researcher for the firm and quickly became a partner, earning over $500,000 a year-a princely sum at that time, especially for a twenty-five-year-old. In 1926, Graham formed an investment partnership with Jerome Newman. He also began lecturing on finance at Columbia, and continued to maintain his scholastic ties with the school and academia until he retired in 1956. The Crash of 1929 proved to be a turning point for Graham. The dark days almost wiped him out, but the partnership survived largely through the aid of friends and the sale of most of the partners’ personal assets. Graham was able to get back on his feet but the experience taught him valuable lessons that he would soon share with the world through his books. In 1934, Benjamin Graham partnered with another academic from Columbia, David Dodd, to publish the classic Security Analysis-a book, like The Intelligent Investor, that has never been out of print. Despite the recent stock market crash, the book proposed that it was possible to successfully invest in common stocks as long as sound investment principles were applied. In 1949, Graham wroteThe Intelligent Investor, a book widely considered the bible of value investing. It was published to unanimous acclaim, and the principles it espouses have been widely read and taught throughout the world for more than fifty years. Clearly, Graham took his own words to heart. Graham and Newman’s partnership continued until 1956 and never again lost money for its investors. He continued as a partner, while simultaneously writing and lecturing at Columbia. Graham retired from both institutions in 1956. www.capitalideasonline.com Page - 1 On Benjamin Graham Benjamin Graham died in 1976, with the reputation of being the “Father of Security Analysis.” www.capitalideasonline.com Page - 2.

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The Intelligent Investor
THE INTELLIGENT INVESTOR A BOOK OF PRACTICAL COUNSEL REVISED EDITION BENJAMIN GRAHAM Updated with New Commentary by Jason Zweig An e-book excerpt from To E.M.G. Through chances various, through all vicissitudes, we make our way.... Aeneid Contents Epigraph iii Preface to the Fourth Edition, by Warren E. Buffett viii ANote About Benjamin Graham, by Jason Zweigx Introduction: What This Book Expects to Accomplish 1 COMMENTARY ON THE INTRODUCTION 12 1. Investment versus Speculation: Results to Be Expected by the Intelligent Investor 18 COMMENTARY ON CHAPTER 1 35 2. The Investor and Inflation 47 COMMENTARY ON CHAPTER 2 58 3. A Century of Stock-Market History: The Level of Stock Prices in Early 1972 65 COMMENTARY ON CHAPTER 3 80 4. General Portfolio Policy: The Defensive Investor 88 COMMENTARY ON CHAPTER 4 101 5. The Defensive Investor and Common Stocks 112 COMMENTARY ON CHAPTER 5 124 6. Portfolio Policy for the Enterprising Investor: Negative Approach 133 COMMENTARY ON CHAPTER 6 145 7. Portfolio Policy for the Enterprising Investor: The Positive Side 155 COMMENTARY ON CHAPTER 7 179 8. The Investor and Market Fluctuations 188 iv v Contents COMMENTARY ON CHAPTER 8 213 9. Investing in Investment Funds 226 COMMENTARY ON CHAPTER 9 242 10. The Investor and His Advisers 257 COMMENTARY ON CHAPTER 10 272 11. Security Analysis for the Lay Investor: General Approach 280 COMMENTARY ON CHAPTER 11 302 12. Things to Consider About Per-Share Earnings 310 COMMENTARY ON CHAPTER 12 322 13. A Comparison of Four Listed Companies 330 COMMENTARY ON CHAPTER 13 339 14.
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