No series on the mistakes of the world’s greatest investors would be complete without looking at the mistakes made by the Godfather of value investing Benjamin Graham, in the early part of his career. Losing It All Pt.3 Losing It All Pt.2 Losing It All Pt. 1 Graham survived the 1929 crash but only just, and in the years after, he re-built his investing methods around what he had learned at the time and compiled these lessons into his first book,…
Below is a carbon copy of Benjamin Graham’s lecture notes on his 11 rules for appraising stocks. You can find a copy of the original set of notes here, although they are essentially illegible. The original document misses off the final rule, number eleven, which is mentioned elsewhere. OUTLIER OF NOVEMBER 6TH LECTURE Benjamin Graham RULES FOR APPRAISAL OF COMMON STOCK FOR INVESTMENT PURPOSES Appraised Value is determined by (a) estimating the Earnings Power (b) applying the appropriate multiplier (c)…
I recently stumbled across collection of notes from Benjamin Graham’s lectures when he was a professor at Columbia University. The notes were taken during lectures given in 1946, six years after the 1940 version of “Security Analysis” was published. Actually, the name of the course was “Current Problems in Security Analysis”, and was, in Graham’s words an“attempt to bring our textbook ” Security Analysis” up to date, in the light of the experience of the last six years since the…
On February 15, 1999, Barron’s magazine published an opinion piece entitled, Why Value Investors Are Different. The article looked at one of the most important periods of Warren Buffett’s career and was written by none other than Seth A. Klarman. As usual, Seth Klarman’s insights are invaluable. So, here are some key takeaways from the article. Seth Klarman: Why value investors are different Seth Klarman begins his piece on Warren Buffett with the following statement: “The most dramatic and valuable…
Following the my last ten part series on the life and career of Charlie Munger, Vice-Chairman of Berkshire Hathaway Corporation and Warren Buffett’s right hand man, in this series I’m taking a look at Warren Buffett’s early career. Before Warren Buffett became well-known, and before he acquired Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B), he ran a number of partnerships, investing the money of family, friends and outside investors. It’s these partnerships that helped build his reputation and provided the funds for him…
Société Générale publishes a monthly update on the performance of several value orientated fundamental trading strategies across both developed and emerging markets. For deep value investors, one of the most interesting screens is the Graham & Rea deep value screen. The screen is a strategy developed by Benjamin Graham and James Rea. It uses a set of ten basic investment criteria used to identify deep-value opportunities. These criteria are also known as Graham’s last will, and the Benjamin Graham deep…