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Benjamin Graham | Value Investor
Last Update: 5/23/2013
Benjamin Graham Profile: The late Benjamin Graham may be the oldest of the gurus we follow, but his impact on the investing world has lasted for
decades after his death in 1976. Known as both the "Father of Value Investing" and the founder of the entire field of security analysis,
Graham mentored several of history's greatest investors -- including Warren Buffett -- and inspired a slew of others, including
John Templeton, Mario Gabelli, and another of Validea's gurus, John Neff. Graham built his fortune and reputation after living
through some extremely difficult times, including both the Great Depression and his own family's financial woes following his father's
death when Benjamin was a young man. His investment firm posted per annum returns of about 20 percent from 1936 to 1956, far outpacing
the 12.2 percent average return for the market during that time.
Benjamin Graham Investment Strategy: Not surprisingly, given that he lived through his family's financial troubles and the Great Depression,
Graham used a conservative, risk-averse approach that focused as much on preserving capital as it did on producing big gains. Trendy,
hot stocks didn't garner his attention; he was concerned with companies' balance sheets and their fundamentals. How much debt did they
carry? How did their stock price compare to the amount of per-share earnings they were generating? Did the firm have strong sales figures?
This value-centric, company-focused approach may be used by a lot of investors today, but it was Graham who first popularized it.
A key concept behind his approach was the "margin of safety" -- the difference between a stock's price and the value of its underlying business.
Graham focused on stocks with high margins of safety (meaning their stocks were selling on the cheap compared to what he believed to be the
intrinsic value of their businesses), because their already low prices offered significant downside protection.
Book Used for Benjamin Graham Strategy: The Intelligent Investor
Benjamin Graham Model Portfolio Performance:
Since Inception: 312.71%
S&P 500: 66.85%
Full Performance Details
Stocks Passing Benjamin Graham Strategy: 10 Stock Model Portfolio | 20 Stock Model Portfolio | All Stocks Passing Methodology
Recent Upgrades and Downgrades:
Upgrades - NATIONAL PRESTO INDUSTRIES INC. | HARMONY GOLD MINING CO. (ADR) | CENTRAL GARDEN & PET CO | OFFICEMAX INC | PRECISION CASTPARTS CORP. |
Downgrades - CUMMINS INC. | JOY GLOBAL INC. | NN, INC. | ATWOOD OCEANICS, INC. | LSB INDUSTRIES, INC. |
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