Benjamin Graham

Benjamin Graham

Who is Benjamin Graham?

Benjamin Graham (May 8, 1894 – September 21, 1976) was an American economist and investor. He was born in London, graduated from Columbia University at the age of 20, and became Warren Buffet’s teacher there in 1950.

Graham is popularly known as “the father of value investing,” having systematized the process of evaluating companies in order to find low-risk investment opportunities that would appreciate over time.

Graham is the author of The Intelligent Investor, a seminal book on value investing that Warren Buffet described as “by far the best book on investing ever written.”

What is the Benjamin Graham Investing System?

Graham analyzed each company according to six factors: profitability, stability, growth in earnings, financial position, dividends and price history. He benchmarked every potential investment based on these factors to determine which companies were presently undervalued. He bought stock in those undervalued companies and waited for Wall Street to bid up these stocks to be more in line with the company’s true value.

A key concept of Graham’s system is the Margin of Safety, which is achieved by buying a stock only when it falls below it 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.

Graham’s spirit lives on today in Cabot Benjamin Graham Value Investor, which provides expert value stock selection advice to thousands of investors, based on the system Graham pioneered

Best Large-Cap Value Stocks- Cabot

For more information on this time-tested, low-risk system, request our free special report"Best Large-Cap Value Stocks." Get it today!

You’ll also receive a no-cost subscription to the Cabot Wealth Advisory, your source for timely market insights and stock recommendations from our expert analysts.

Best Large-Cap Value Stocks

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Cabot Benjamin Graham Value Investor is authored by J. Royden Ward. Roy’s goal is to provide conservative long-term investors with exceptional recommendations of undervalued common stocks. By taking advantage of the knowledge and expertise shown to us by Ben Graham and later by Warren Buffett, Roy can help you build a sound portfolio of quality stocks.

•  A Short Biography

Ben Graham was born in London in 1894. His original name was Grossbaum, but he changed it as a young man, the better to fit into the Wall Street environment...

•  Benjamin Graham's Seven Criteria for Picking Value Stocks

Value investing is more concerned with the fundamentals of a company's business rather than its stock price or other market factors affecting its price...

  Read about Ben Graham and his legacy in the Cabot Wealth Advisory Archives:
A Successful Investor
The world is full of successful investors. Some are famous; most are not. Today’s story is about one of the latter, a guy named Joe. Joe argues that his broad diversification provides safety. This is true, but it’s an argument usually used by value investors.
Who is Warren Buffett?
In 1954, Warren Buffett convinced Benjamin Graham to hire him as a securities analyst in New York. When Mr. Graham retired two years later, Buffett started his own investment company. His initial investments in Berkshire Hathaway and GEICO became huge investment successes.
My Benjamin Graham Connection
Back in 1946, Dr. Wilson Payne and Ben Graham held meetings at Babson College to find a way to calculate the true fundamental value of a company. The two collaborated to devise formulas that would estimate a fair value range for stocks based on Mr. Graham’s guidelines.
Three Ways to Weather a Market Correction
Benjamin Graham, the creator of the value-investing system Roy adapted in the 1960s, enjoyed average returns of 20% per year no matter what the condition of the broad market. The reason for this is Graham didn't get suckered in by hype.