Value Recap – The Man That Started It All, Benjamin Graham

This article was first published on May 17, 2014

Who is the man that popularize the idea of Value Investing? Commonly known as the “Father of Value Investing”, Benjamin Graham is the man that started it all.

In his time, he was famous for many things including writing classic books such as Security Analysis (1934) and The Intelligent Investor (1949), he is also known (albeit less known) for being one of the creators of the current Institute of Chartered Financial Analyst. Most importantly, he is considered the mentor of Warren Buffett, the sage of Omaha himself.

His Rise and Fall and Rise Again

Benjamin Graham graduated from Columbia University in 1914. After that he began working in the investment industry in New York. He gain his wealth during that time but unfortunately lost it all during the great depression. He never forget his experiences during the great depression. He then put down his ideas in Security Analysis, the main source where described his method of investing and how an investor should value securities.

Benjamin Graham stated in his books that investors should view investment as a part-ownership into a business rather than just a piece of paper. Only by viewing each investment as a businessman, can it be consider a sound investment.

He talked about how investors should view the market as a business partner called “Mr. Market”. However, Mr market is someone who is constantly willing to sell his interests or buy someone out. As Mr. Market is rather erratic, we should not be influenced by his irrationality and only respond to him when his offer is advantageous for us.

How Professional Certification Came About

Graham wanted some sort of official certification body for the security analysis profession. He assisted in the creation of the Institute of Chartered Financial Analyst, an organisation that certifies and promotes high ethical and professional standards among financial analysts.

Warren Buffett

Much have been talked about regarding Warren Buffett and Benjamin Graham. His influence on the Oracle of Omaha is huge and there might never be Warren Buffett if there was not Benjamin Graham.

Value In Action

Any investor who has just started should pay close attention to the wisdom of Benjamin Graham. Learning about the father of investment should be the first thing every new investor does.

 

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The information provided is for general information purposes only and is not intended to be any investment or financial advice. All views and opinions articulated in the article were expressed in Stanley Lim’s personal capacity and do not in any way represent those of his employer and other related entities. Stanley Lim doesn’t own shares in any companies mentioned above.

 

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