Benjamin Graham is the godfather of value investing, and his teachings form the basis of every value strategy used today.
Here are some comments from former Graham students about their master, what they learned from Graham and how they’ve built his processes into their own investment strategies.
As a teacher Graham was highly informative, and many of his students went on to accomplish great things.
"[On establishing the New York Society of Security Analysts (NYSSA) in 1937 with Benjamin Graham and 18 other security analysts] We tried to arrange meetings with corporate executives, and we convinced them to come to a cheap restaurant in New York City, where we showed them the advantage of speaking to us because we could help promote their companies if we could learn more about their businesses. Those meetings were very useful at first, but over the years they have turned into what we call ‘analysts conference calls,’ which are less productive because what executives try to do now is manage analysts’ expectations." – Irving Kahn
"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." – Marshall Weinberg
“Basically we like to buy stocks which we feel are undervalued, and then we have to have the guts to buy more when they go down...And that’s really the history of Ben Graham.” – Walter Schloss
"Ben [Graham] always believed in the Socratic approach. He never provided students with a ready answer, believing that through thorough discussions and rational deductions, solid conclusions would be reached. I remember asking him about the word ‘tranche’ as it applied to finance. Instead of providing the definition right way, Ben asked me to look it up in the dictionary. I discovered that it means ‘slice’ in French. Ben believed that if he told me the answer right away, I would forget it, but if I took the initiative to look it up myself, then I would always remember it." – Irving Kahn
"[On enrolling in Benjamin Graham’s security analysis class] It was a two-hour course one evening a week. Ben used examples of both popular and unpopular securities to illustrate the application of security analysis. Many students took his class year after year because they got many stock ideas from him and profited from them. Ben didn’t care if students made money from his ideas because he was more into analysis as an intellectual exercise than for the financial reward." – Irving Kahn
"I think he talked about risk based on the fact that he wanted to buy something at less than 50 cents on the dollar. He just wanted to buy something that was undervalued.
"He was very aware that he was going against the tide. He was buying companies that were trouble, he was willing to buy something that nobody else wanted." – Edwin Schloss, Walter Schloss' son
"Ben’s [Graham] best book is not the book he’s known best for ['The Intelligent Investor']. His best book, his most important book, was ‘Storage and Stability.’" – Irving Kahn
“I worked for Benjamin Graham for 9½ years, and Ben said he was going to retire and move to California.
“I had to get another job, so one of the people who was a stockholder of Graham Newman came to me and said, ‘Walter, if you start a fund, I will put some money in it.’ We ended up with $100,000. The structure was that I would not get paid unless we realized gains. The kind of stocks I bought were not growth stocks. Graham was really value oriented. In those days he would buy stocks that were selling below working capital. There were less of them, but they were still around.” – Walter Schloss
"He (Graham) bought a little of everything. So he was widely diversified, which was not the style that I would go for." -- Warren Buffett (Trades, Portfolio)
"He believed in cash. He did not like companies that had a lot of bonds." – Irving Kahn
