Ben Graham

Jason Zweig on the Principles of Intelligent Investing, and the Enduring Wisdom of Ben Graham

In the 35th episode of The One Percent Show, I talked with Jason Zweig, a personal finance columnist for The Wall Street Journal and the editor of Benjamin Graham’s The Intelligent Investor. Jason is also the author of Your Money and Your Brain, one of the first books to explore the neuroscience of investing, and The Devil’s Financial Dictionary, a satirical glossary of Wall Street.

We explored the critical lessons of becoming an intelligent investor, how to survive the stock market, why Ben Graham’s ideas still matter, and much more.

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Of Ben Graham, Investing, and Eternity

The Sketchbook of Wisdom: Did you get your copy?

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The Heilbrunn Center for Graham and Dodd Investing created a wonderful video in 2013 titled ‘Legacy of Ben Graham,’ which contains bytes from some of his students on how Graham’s teachings changed their lives.

Marshall Weinberg, one of the students from Graham’s class said that the biggest lesson he drew out of that class was on long-term thinking. Here’s what he said –

One sentence changed my life…Ben Graham opened the course by saying: ‘If you want to make money in Wall Street you must have the proper psychological attitude. No one expresses it better than Spinoza the philosopher.’
When he said that, I nearly jumped out of my course. What? I suddenly look up, and he said, and I remember exactly what he said: ‘Spinoza said you must look at things in the aspect of eternity.’ And that’s what suddenly hooked me on Ben Graham.

Spinoza actually said, “Sub specie aeternitatis,” which translates to “under the aspect of eternity,” or “from the perspective of the eternal.”

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Ben Graham: Just Plain Lucky?

The Sketchbook of Wisdom: The second print of my book – The Sketchbook of Wisdom – is now available. Click here to reserve your copy. Send me an email at vishal@safalniveshak.com if you wish to place bulk orders.

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Remember Ben Graham, the guy who wrote The Intelligent Investor? And who taught Warren Buffett to become Warren Buffett?

Well, if you really know who Graham was, you also know that he is associated with buying something cheap (one dollar worth at fifty cents) and then selling it when it reaches a value that reflects what it’s worth.

A very copybook, calculated approach, right? Like what a Rahul Dravid would do in cricket.

A Tribute to the World’s First Investing Teacher

As part of my Mastermind Value Investing Course, I ask students to watch the following video created by ‘The Heilbrunn Centre for Graham and Dodd Investing’ of Columbia Business School, where Benjamin Graham taught value investing in the late 1920s.

This video showcases Graham giving a lecture, and also his students’ views on the legacy of this great man whom the world now knows as the ‘Father of Value Investing’.

If you can’t watch the video above, click here.

My exercise for Mastermind students is to watch the complete video and share the “one” big idea from it that inspires them the most from Graham’s teachings or from what his students say of their teacher.

How to Handle Your Money

Benjamin Graham was one of the most successful investors who ever lived and remains the most influential investment thinker of all time.

He was the one who taught Warren Buffett the art of investing, and was also his first boss.

Graham worked on Wall Street for more than four decades, ran a market-beating mutual fund, taught finance at Columbia Business School and wrote two classic books on investing.

Security Analysis (1934) is still the bible for professional money managers. The Intelligent Investor (1949) is, in Buffett’s words, “by far the best book about investing ever written.”

In June 1955, Graham gave an interview on the basics of handling money. Almost 60 years have passed since then, but a large number of investing ideas that Graham talked about then, remain valid to this day.

Legacy of Benjamin Graham: A Video Tribute

I usually write on Safal Niveshak thrice a week, and on alternate days. So hearing from me two days back-to-back may seem odd to you.

But like a five-year old kid who wants to share with the world his new toy, I wanted to share with you a video I stumbled upon last night and could not wait to do that till Wednesday.

I couldn’t be patient like I try to be in my investing, so here I go! 🙂

Analyzing Crompton Greaves, the Ben Graham Way

Ben Graham, the Father of Value Investing, writes the following at the start of Chapter 37 of Security Analysis…

In the last six chapters, our attention was devoted to a critical examination of the income account for the purpose of arriving at a fair and informing statement of the results for the period covered.

The second main question confronting the analyst is concerned with the utility of this past record as an indicator of future earnings.

This is at once the most important and the least satisfactory aspect of security analysis. It is the most important because the sole practical value of our laborious study of the past lies in the clue it may offer to the future; it is the least satisfactory because this clue is never thoroughly reliable and it frequently turns out to be quite valueless.

These shortcomings detract seriously from the value of the analyst’s work, but they do not destroy it. The past exhibit remains a sufficiently dependable guide, in a sufficient proportion of cases, to warrant its continued use as the chief point of departure in the valuation and selection of securities.

How to Become Graham’s “Intelligent” Investor

In 1949, when asked what it means to be an “intelligent” investor, Benjamin Graham, the father of Value Investing, said…

The word “intelligent”…will be used…as meaning “endowed with the capacity for knowledge and understanding.” It will not be taken to be “smart” or “shrewd”, or gifted with unusual foresight or insight. Actually the intelligence here presupposed is a trait more of the character than the brain.

Then, in 1976, he summed up “investing” with these words…

The main point is to have the right general principles and the character to stick with them.

This Small Book Can Make a Big Difference in Your Investing Life

“When in Rome, do as the Romans do,” goes the famous saying.

What this saying suggests is that you need to know the language and customs of people when you visit an unknown society. Doing so is polite, and also advantageous.

The same holds true when you enter the ‘investing society’. Before you enter, your gate pass must show that you understand the language of business.

And what’s the language of business? The answer – Numbers.
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