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Worlds’ Greatest Investors Part 3; Benjamin Graham

We profile some of the greatest investors in the world. Their achievements have influenced and inspired many. In Part 3, we feature Benjamin Graham.

 

 

Benjamin Graham

 

1) Benjamin’s Famous Quotes

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

  • "The one principal that applies to nearly all these so called "technical approaches" is that one should buy because a stock or the market has gone up and one should sell because it has declined. This is the exact opposite of sound business sense everywhere else, and it is most unlikely that it can lead to lasting success in Wall Street. In our own stock market experience and observation, extending over 50 years, we have not known a single person who has consistently or lastingly made money by following the market. We do not hesitate to declare that this approach is as fallacious as it is popular." 

 

2) Benjamin’s Background

Benjamin Graham is 'The Father of Value Investing'.  Graham founded many of the fundamental analysis and value investing principals that are used today by fund managers and famous investors such as Peter Lynch and Warren Buffet. 

 

3) Benjamin’s Investment Style 

Graham looks for what he calls a 'Margin of Safety' when investing in stocks. This is defined by how much a stock is trading below it's intrinsic value which is what the business would be worth if it were sold today. Graham likes large companies with strong sales since they pose less risk. He also likes companies that pay out dividends and are in good financial shape. Graham looked for companies that are trading below their historical PE average and trading below 1.2 times book value. The value investing investment style has proved successful over the years.

 

 

 

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