The Dean of Wall Street, Benjamin Graham, was renowned for investing in net working capital stocks. The books Security Analysis and The Intelligent Investor cover this important area.
Although a lot has been written about general net working capital asset investing not many investors have actually scrutinised Graham’s investments. Most value investors know the Geico story, or they’ve heard of Graham’s pursuit of Northern Pipeline management but what about the more ordinary investments?
This is the first article of a series that looks at Ben Graham’s ‘bread and butter’ investments in common stocks as held by the Graham-Newman Partnership. Methods such as work outs and arbitrage will be largely ignored due to the clear lack of information available to scrutinise those types of plays.
Below is a layout of 9 companies as of yearend 31st January, 1946. I have no idea how long these companies were in the portfolio before this time.
Example one, A.D.F Co, shows the increase of Graham’s holding from 1,300 shares to 4,600 shares yet the value of the shares only rose from $ 7,800 to $ 9,200.
Bell Aircraft is amongst the larger investments in common stocks that Graham-Newman made. Again the number of shares held increased whilst the value of the shares held increased by a much lower percentage.
One has to remember also that ’back in the day’ dividend yields were far larger than they are today. In the book ‘Benjamin Graham on Investing’ Graham illustrates plenty of examples with dividend yields of 6-9%. Although written around twenty years previous to the Graham-Newman Partnership large dividends were still a feature of the investing landscape during the 1940’s and 1950’s.
Readers can draw further conclusions regarding Graham-Newman’s investing style in common stocks from the data presented below:
I am a partner at www.shareladder.com for whom I write a newsletter. Currently the portfolio constructed from the newsletter is up 42% over the last year. The investment principles I follow are mainly derived from the Benjamin Graham school of investing.
Although a lot has been written about general net working capital asset investing not many investors have actually scrutinised Graham’s investments. Most value investors know the Geico story, or they’ve heard of Graham’s pursuit of Northern Pipeline management but what about the more ordinary investments?
This is the first article of a series that looks at Ben Graham’s ‘bread and butter’ investments in common stocks as held by the Graham-Newman Partnership. Methods such as work outs and arbitrage will be largely ignored due to the clear lack of information available to scrutinise those types of plays.
Below is a layout of 9 companies as of yearend 31st January, 1946. I have no idea how long these companies were in the portfolio before this time.
Example one, A.D.F Co, shows the increase of Graham’s holding from 1,300 shares to 4,600 shares yet the value of the shares only rose from $ 7,800 to $ 9,200.
Bell Aircraft is amongst the larger investments in common stocks that Graham-Newman made. Again the number of shares held increased whilst the value of the shares held increased by a much lower percentage.
One has to remember also that ’back in the day’ dividend yields were far larger than they are today. In the book ‘Benjamin Graham on Investing’ Graham illustrates plenty of examples with dividend yields of 6-9%. Although written around twenty years previous to the Graham-Newman Partnership large dividends were still a feature of the investing landscape during the 1940’s and 1950’s.
Readers can draw further conclusions regarding Graham-Newman’s investing style in common stocks from the data presented below:
| A.D.F Co. | ||
| Year End | Number of Shares | Value ( $ ) |
| 31-January-1946 | 1,300 | 7,800 |
| 31-July-1947 | 4,600 | 9,200 |
| 31-January-1948 | 4,600 | 10,925 |
| 31-January-1949 | 4,600 | 5,750 |
| 31-January-1950 | 4,600 | 6,325 |
| American Shipbuilding Company | ||
| Year End | Number of Shares | Value ( $ ) |
| 31-January-1946 | 100 | 4,462.50 |
| Bell Aircraft Corporation | ||
| Year End | Number of Shares | Value ( $ ) |
| 31-January-1946 | 3,890 | 126,425 |
| 31-July-1947 | 12,300 | 152,212 |
| 31-January-1948 | 12,300 | 221,400 |
| Brewster Aeronautical Corp. | ||
| Year End | Number of Shares | Value ( $ ) |
| 31-January-1946 | 10,000 | 50,000 |
| 31-July-1947 | 12,100 | 58,988 |
| 31-January-1948 | 12,100 | 7,562 |
| 31-January-1949 | 12,600 | 1,008 |
| 31-January-1950 | 12,600 | 1,008 |
| 31-January-1951 | 12,600 | - |
| Buda Company | ||
| Year End | Number of Shares | Value ( $ ) |
| 31-January-1946 | 2,500 | 77,500 |
| 31-July-1947 | 4,000 | 67,000 |
| 31-January-1948 | 4,000 | 52,000 |
| 31-January-1949 | 3,700 | 39,775 |
| 31-January-1950 | 4,000 | 45,000 |
| 31-January-1951 | 4,000 | 54,000 |
| 31-January-1952 | 4,000 | 56,000 |
| 31-January-1953 | 4,000 | 57,500 |
| Cuban American Manganese Corporation | ||
| Year End | Number of Shares | Value ( $ ) |
| 31-January-1946 | 1,000 | 5,250 |
| Electric Boat Company | ||
| Year End | Number of Shares | Value ( $ ) |
| 31-January-1946 | 2,200 | 53,075 |
| L.H. Gilmer Company | ||
| Year End | Number of Shares | Value ( $ ) |
| 31-January-1946 | 2,200 | 7,700 |
| 31-July-1947 | 2,200 | 6,600 |
| 31-January-1948 | 2,200 | 6,325 |
| Gisholt Machine Company | ||
| Year End | Number of Shares | Value ( $ ) |
| 31-January-1946 | 200 | 4,400 |
| 31-July-1947 | 200 | 3,225 |
I am a partner at www.shareladder.com for whom I write a newsletter. Currently the portfolio constructed from the newsletter is up 42% over the last year. The investment principles I follow are mainly derived from the Benjamin Graham school of investing.
