Benjamin Graham: Life, Legacy and Famous Quotes

Photo de Benjamin Graham

Photo de Benjamin Graham

Benjamin Graham is possibly the most influential person in the investment world of the XNUMXth century. We are before the father of value investing, teacher of teachers, among whom is Warren Buffett, the most successful investor of all time. As we will see, his legacy lives on more than ever.

In this article we will do a brief review of his life, his contributions to the world of investment and a compilation of his famous phrases.

Investing before Benjamin Graham

The world of investing in the early XNUMXth century was very different from what we know today. In general, only fixed income was considered investment, while the purchase of shares was considered speculative, as there were no reliable methods for making investment decisions in shares. Few investors used investment methods based on the fundamental data of the businesses behind the shares, with other pseudo-investment methods being common, such as technical analysis, based on graphs and without any economic, logical or financial basis, or even methods of investment. pure speculation without any basis that could differentiate it from a game of chance.

Benjamin Graham was able to model an investment method based on logic, critical reasoning and financial analysis, known as value investing. Not only that, but this method was very profitable in practice, in fact it would become the most effective in the history of investment. Graham was also involved in creating the the allegory of Mister Market that we already analyzed in this blog.

  • Security Analysis: Written in collaboration with his assistant David Dodd. Book focused on the valuation of investments from a technical aspect with a more practical approach than "the intelligent investor".
  • Famous phrases by Benjamin Graham

    Investors' biggest losses often come from buying low-quality assets in good economic times.
    Investing is smarter the more it resembles a business operation.
    It is surprising to see how many tremendously capable entrepreneurs try to operate on Wall Street, ignoring all the principles of good sense by which they have achieved success in their own companies.
    People who cannot control their emotions are not apt to make a profit through investing.
    You will not be right or wrong because the crowd disagrees with you. You will be right because your data and reasoning are correct.
    Achieving satisfactory investment results is easier than most people think; achieving superior results is much more difficult than it sounds.