Benjamin Graham

He was born Benjamin Grossbaum in London to English parents who emigrated to New York when he was an infant. His father ran a small porcelain-importing business and died when Benjamin was nine, and the Panic of 1907 then wiped out what savings the family had left, in part because his mother had borrowed to buy stocks on margin. The Grossbaums anglicized the name to Graham not long after, one more adjustment against a country that noticed a Jewish surname. He entered Columbia College at sixteen and graduated salutatorian in three and a half years, turning down offers to teach mathematics, English, and philosophy there because his widowed mother needed him earning money, not tenure.

Graham went to work on Wall Street at twenty to support his mother and by his twenties had made a name forcing Northern Pipeline, a Rockefeller-controlled company sitting on cash it refused to distribute, to pay shareholders what he argued they were owed. In 1934 he and David Dodd published Security Analysis, which treated buying a stock as buying a fraction of a real business rather than a lottery ticket, and in 1949 he distilled the same discipline into The Intelligent Investor. He ran Graham-Newman Corp. with Jerome Newman from 1936, taught the method at Columbia Business School, where Warren Buffett was his student in 1951, and in 1948 put a large share of the firm's capital into a small Washington insurer called GEICO. He retired from active investing in 1956.

The rule Graham is remembered for — diversify broadly, treat any single stock as replaceable, protect a margin of safety above all — is not the rule that made him rich. GEICO alone violated it: Graham-Newman put roughly a quarter of the fund into one insurance company, well past Graham's own stated limits, and regulators eventually forced the firm to distribute the stake to investors rather than keep holding it. That single position ended up generating more of Graham's wealth than four decades of disciplined, diversified, unglamorous investing combined. He conceded as much late in life. Married three times, with four children, he also kept his personal finances and family life harder to reconstruct than his published formulas — Wall Street's most quoted advocate of legible numbers left a private record biographers still argue over.

He spent his last years partly in the south of France, teaching occasionally, revising The Intelligent Investor, and telling interviewers that most investors would do better in a low-cost index fund than trying to out-analyze him — decades before index funds existed as a retail product. He died in Aix-en-Provence on September 21, 1976. Warren Buffett, who named a son after him, has called The Intelligent Investor the best book ever written on investing and still points newcomers to it over his own record. Columbia Business School continues to teach the Graham and Dodd method as its own track. Far more people today claim to invest the Graham way than actually follow his considerably more conservative rules.

Benjamin Graham's life against the full span of the corpus.

• The Northern Pipeline Affair case
  Early shareholder activism forcing a Rockefeller-controlled company to return excess cash 1927
• Security Analysis book
  Written with David Dodd, the founding text of value investing 1934
• Graham-Newman Corporation company
  Run with Jerome Newman until it closed in 1956 1936
• GEICO stake case
  A concentrated bet that broke his own diversification rule and made his fortune 1948
• The Intelligent Investor book
  Warren Buffett has called it the best book on investing ever written 1949

• 1903 aged ~9 His father dies, leaving the family without its main income
• 1907 aged ~13 The Panic of 1907 wipes out the family's remaining savings His mother had borrowed to buy stocks on margin.
• 1914 aged ~20 Graduates salutatorian from Columbia College at 20 He turned down faculty offers in three departments.
• 1927 aged ~33 Forces a payout from the Rockefeller-controlled Northern Pipeline Company
• 1934 aged ~40 Publishes Security Analysis with David Dodd
• 1936 aged ~42 Founds Graham-Newman Corporation with Jerome Newman
• 1948 aged ~54 Puts a large share of the fund into GEICO
• 1949 aged ~55 Publishes The Intelligent Investor
• September 21, 1976 aged 82 Dies in Aix-en-Provence, France

• Warren Buffett b. 1930
  Value investor whose disciplined approach built one of the largest personal fortunes in American history. student, later exceeded him
• John C. Bogle 1929–2019
  Founded Vanguard and launched the first index mutual fund for retail investors. realized his index-fund suggestion
• J. P. Morgan 1837–1913
  Banking titan who stabilized the economy during the Panic of 1907 and shaped modern finance. the Wall Street era he broke from
• Franklin D. Roosevelt 1882–1945
  32nd President who led the nation through the Great Depression and most of World War II. regulated the industry he analyzed