Graham: The Pursuit Of Guaranteed Profits

author name submits:Benjamin Graham had spent most of his teaching life preaching the values of thrift and finding good bargains. In his class lectures, he gave the prototypical explanation of value investing by saying it's about "finding dollar bills trading for fifty cents." This phrase became more than a pithy saying to his star protégé, Warren Buffett, and Buffett attributed the success of his partnership (which earned 29.5% annually from 1957 to 1969) to Graham's insistence on bargain hunting.

By Insider Monkey: Many investors, such as Warren Buffett, praise defensive investing. Buffett says the first rule of investing is not to lose money, and the second rule of investing is not to forget the first rule. The mentor of this legendary investor, Benjamin Graham, always recommended investing with a margin of safety. Defensive investing doesn’t always bring the best returns; however, it usually provides better protection in inflationary environments.

author name submits:If Benjamin Graham had boiled his investing philosophy down to three words, they would have been “margin of safety.” At the beginning of Chapter XVI of his famous work The Intelligent Investor, he outlines the philosophical rationale for investors to pursue the greatest amount of margin of safety—that is, room for error—that can protect them from disappointing returns over the long-run.

BySerenity:Benjamin Graham was an economist and professional investor who taught Warren Buffett, Irving Kahn, Walter J. Schloss and other famous investors at Columbia Business School.Buffett, who credits Graham with grounding him with a sound intellectual investment framework, describes Graham as the second most influential person in his life after his own father. In fact, Graham had such an overwhelming influence on his students that two of them, Buffett and Kahn, named their sons after him.

By Insider Monkey: Benjamin Graham, mentor of Warren Buffett, always recommended investing with a margin of safety. He described this concept in Intelligent Investor in detail.

Chuck Carnevale submits:As most everyone knows, Warren Buffett received much of his initial investing education from the father of modern security analysis, the venerable Ben Graham. Personally, I attribute most everything I know about investing from reading the teachings of both Graham and Buffett.

“To have a true investment, there must be a true margin of safety. And a true margin of safety is one that can be demonstrated by figures, by persuasive reasoning, and by reference to a body of actual experience.”  When celebrated value investor Benjamin Graham set out his thinking on why and when to purchase stocks in his influential 1934 book Security Analysis, his insistence on having a Margin of Safety was a key factor. Years later, Graham’s student Warren Buffett described the phrase as the quot;three most important words in investingquot;.

Brad Thomas submits: When Benjamin Graham, the father of value investing philosophy, passed way in 1976, Warren Buffett wrote this about Graham’s teachings: