10 Benjamin Graham Quotes to Improve Your Investing Results

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Who is Benjamin Graham?

Benjamin Graham (May 8, 1894–September 21, 1976) was an American economist and one of the most influential investors of our time.

Benjamin Graham was born in London, graduated from Columbia University at the age of 20, and became Warren Buffett’s teacher in 1950.

Graham is the author of The Intelligent Investor, a seminal book on value investing that Warren Buffett called “by far the best book on investing ever written.” Buffett was just one of Graham’s disciples. Graham also taught or influenced Mario Gabelli, John Neff, Michael Price, and John Bogle.

Graham is widely celebrated as “The Father of Value Investing.” He created the process of evaluating companies to find their intrinsic value. Graham could thereby purchase companies with undervalued stock prices and avoid buying companies with over-inflated prices.

The Cabot Undervalued Stock Advisor recommends stocks based in part on the Benjamin Graham investing system. Graham analyzed every company according to seven factors: profitability, stability, earnings growth, financial position, book value, dividends, and price history. He analyzed every potential investment based on these factors to determine which companies were undervalued.

A key concept of the Benjamin Graham system is the Margin of Safety, which is achieved by buying a stock only when it falls below its maximum buy price. That price is calculated using the metrics that determine the intrinsic value of a company. Strict adherence to the rule of buying only below the maximum buy price will minimize potential losses while maximizing potential profits.

In essence, Graham developed a whole new approach to investing based on measuring a stock’s price versus its intrinsic value. For nearly a full century, that approach has beaten the market. Since 1926, the Benjamin Graham value investing strategy has achieved average annual returns of 20% a year.