Value Investing, or How Not to Go Broke

Few outside the investment circle would have known him, but to those that lounge on Wall Street, it is as familiar as the names of George Washington or Pythagoras. He is Benjamin Graham, the father of value investing.

Graham was born in England, but he soon moved to New York with his two older brothers. His father died young at only 35, leaving his family in the care of Maurice Gerard, his uncle who is a civil engineer. Gerard quickly realized young Graham’s talents and nurtured them, later even becoming one of Graham’s first business partners. Graham then achieved the second highest score ever given on a national scholarship test and was accepted into the University of Columbia with a scholarship. He graduated the second of his class.

Upon entering Wall Street, he worked his way up, from the very basic job of posting stock listings to a highly respected investor. He used his natural talents of logic and mathematics to analyse the market and the companies behind them, opening a new path to investments. It is not just about looking at fluctuations and the DJIA, the company asset value, or insider information. By combining deep analysis into all parts of company data, he created a cult in Wall Street who followed his example to this day.

He had realized at the peak of career that he has a duty to pass on his knowledge and thinkings to those who need it. He went to teach at his alma mater, Columbia University, creating a popular course that many of the current world’s greatest investors sat through. His most famous student is perhaps Warren Buffett, with a net worth of 79.2 B dollars. Graham’s natural love of teaching able young minds and his talent for using examples and class debates to reinforce concepts made him a hugely popular teacher with many students travelling from remote places to see him. This group of students eventually became the Graham-Dodds ville, an intellectual village with many elites in Wall Street. The success of those who followed Graham can be clearly seen in Buffett’s 1984 speech of “The Superinvestors“. Graham’s brilliant theories in a world of chance helped many stand their ground even in crisis, and saved them from a fate of bankruptcy. He made his contributions to the economy by levitating investor’s faith in stock exchange after crashes and giving birth to many of the world’s greatest philanthropists. He ideas helped materialize the dreams of many who had nothing but their mind, their 200 dollars and their passion.

Logic and mathematical thinking has always been part of my approach on the world, and the investment community have always been a jewel that I want to explore. Growing up in a foreign country with a middle class family, Graham had learnt to be confident of himself and to believe in his potential to achieve. His generosity and air of positivity are things that I look up to. I believe that his ideas on investing will not just apply to the financial field, but also the lives of everyone influenced by him.

Giphy.com

Leave a Reply

Your email address will not be published. Required fields are marked *