1. Greatest Investors: Introduction
  2. The Greatest Investors: John (Jack) Bogle
  3. The Greatest Investors: Warren Buffett
  4. The Greatest Investors: David Einhorn
  5. The Greatest Investors: Stanley Druckenmiller
  6. The Greatest Investors: David Dreman
  7. The Greatest Investors: Philip Fisher
  8. The Greatest Investors: Benjamin Graham
  9. The Greatest Investors: William H. Gross
  10. The Greatest Investors: Carl Icahn
  11. The Greatest Investors: Jesse L. Livermore
  12. The Greatest Investors: Peter Lynch
  13. The Greatest Investors: Bill Miller
  14. The Greatest Investors: John Neff
  15. The Greatest Investors: William J. O'Neil
  16. The Greatest Investors: Julian Robertson
  17. The Greatest Investors: Thomas Rowe Price, Jr.
  18. The Greatest Investors: James D. Slater
  19. The Greatest Investors: George Soros
  20. The Greatest Investors: Michael Steinhardt
  21. The Greatest Investors: John Templeton
  22. The Greatest Investors: Ralph Wanger

Born: 1884 (London)

Died: 1976

Key Positions: Newburger, Henderson & Loeb

Graham-Newman Corporation

Personal History:
Benjamin Graham authored several books that have served as indispensable reading for rising investors in recent decades, “Security Analysis” (1934, written with David Dodd), and “The Intelligent Investor” (1949). Although born in London, Graham lived in the United States from his early childhood, growing up in New York City. Graham’s father died when he was only nine years old, leaving the Graham family in a difficult financial position and Benjamin with a focus on achieving financial security.

Graham studied at Columbia University, graduating in 1914, and began working at Newburger, Henderson & Loeb as a messenger immediately after graduation. Graham rose through the ranks exceptionally quickly and was named partner at the company by 1920.

Working together with partner Jerome Newman, Graham founded an investment partnership in 1926 and began to lecture at Columbia University on matters of finance. Graham would continue to lecture on these topics until his retirement in 1956. Although the Graham-Newman Corporation suffered greatly during the stock market crash of 1929, the partnership survived and eventually managed to recoup its losses. The experience was a formative one for Graham, who went on to co-author “Security Analysis” in 1934. From that time until its termination in 1956, the Graham-Newman Corporation thrived, sporting an average annual return of 17%.

Investment Philosophy:
Graham’s investment style may best be summed up by his second book, “The Intelligent Investor,” still considered to be one of the seminal texts on investing for the modern era. Graham’s fundamental philosophy was that any worthwhile investment would be worth substantially more than what the investor had to pay for it. Determining value of a potential investment requires thorough analysis (fundamental analysis, by modern parlance). Graham looked for companies with strong balance sheets, little debt, above-average profit margins, and significant cash flow. To describe his efforts to find undervalued companies with temporarily low stock prices and sound fundamentals, Graham coined the phrase "margin of safety.” The margin of safety refers to the difference between the purchase price of a stock and that company’s intrinsic value. The greater the difference between the two, the more attractive the stock is as an investment opportunity: now, these stocks are referred to as low value multiple stocks. Along with Graham’s view of margin of safety as a crucial indicator of an investment’s potential for success, he also believed that market valuations were frequently wrong and that stock prices will always fluctuate.

Noteworthy Publications:

  • "Security Analysis" by Benjamin Graham and David Dodd (1934)
  • "The Intelligent Investor" by Benjamin Graham (1949)
  • "Benjamin Graham: The Memoirs Of The Dean Of Wall Street" by Benjamin Graham and Seymour Chatman (editor) (1996)
  • "Benjamin Graham On Value Investing: Lessons From The Dean Of Wall Street" by Janet Lowe (1999)

Quotes:

"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks."

" Most of the time stocks are subject to irrational and excessive price fluctuations in both directions as the consequence of the ingrained tendency of most people to speculate or gamble … to give way to hope, fear and greed."

"Even the intelligent investor is likely to need considerable willpower to keep from following the crowd."

"It is absurd to think that the general public can ever make money out of market forecasts."

"It is rare that the founder of a discipline does not find his work eclipsed in rather short order by successors. But for over forty years after publication of the book ["Security Analysis"] that brought structure and logic to a disorderly and confused activity, it is difficult to think of possible candidates for even the runner-up position in the field of security analysis." (Warren Buffet, Financial Analyst Journal, November/December 1976)


The Greatest Investors: William H. Gross
Related Articles
  1. Managing Wealth

    The Intelligent Investor: Benjamin Graham

    Benjamin Graham mentored Warren Buffett with his thoughtful investing style.
  2. Investing

    3 Differences Between Benjamin Graham and Warren Buffett

    Analyze three key differences between Warren Buffett and Benjamin Graham. Learn how value investing principles were applied differently by each investor.
  3. Investing

    Ben Graham's Advice on Reading Financial Statements

    Seven pieces of advice from Benjamin Graham on understanding financial statements.
  4. Investing

    Top 5 All-Time Best Mutual Fund Managers

    The best managers produced long-term, market-beating returns and helped investors build big nest eggs. Find out who made the cut.
  5. Financial Advisor

    10 of the Most Famous Financial Advisors (BRK-A)

    The most famous financial advisors are a mix of legendary investors, best-selling financial authors, celebrity talk show hosts and con men.
  6. Investing

    Is Warren Buffett Really A Value Investor?

    Warren Buffett has long been hailed as a value investor. But is that statement still accurate?
  7. Investing

    3 Long-Term Investing Strategies With Strong Track Records

    Learn why discipline and a statistically valid investment strategy can help an investor limit losses and beat the market over the long term.
  8. Investing

    10 Books Every Investor Should Read

    Want advice from some of the most successful investors of all time? Check out our reading list.
  9. Investing

    Top 5 Books Every Young Investor Must Read

    Reading these respected books by finance legends will help you begin investing on the right foot.
  10. Investing

    Twitter's Monthly Active Users Expected to Rise (TWTR)

    Expectations are rising for Twitter, although the stock has been heading in the opposite direction.
Frequently Asked Questions
  1. How did the ABX index behave during the 2008 subprime mortgage crisis?

    Read about the disastrous performance of the various ABX indexes in the subprime mortgage crisis of 2008 during the middle ...
  2. How did moral hazard contribute to the 2008 financial crisis?

    Learn about moral hazard, how it can affect outcomes and how it contributed to the conditions that led to the 2008 financial ...
  3. Which mutual funds made money in 2008?

    Read about the only mutual fund that turned a profit in 2008. Learn about risk-averse investment strategies and the financial ...
  4. Were Collateralized Debt Obligations (CDO) Responsible for the 2008 Financial Crisis?

    Collateralized debt obligations are exotic financial instruments that can be difficult to understand, Learn the role they ...
Trading Center