"There are perhaps four points where Graham departs radically from conventional practice: ...The "value" ...is not a short-term price forecast ...The "value" is a medium-term sustainable value for the firm as on on-going operation. ...The future is estimated conservatively, using realistic estimates of earnings, and prudent multipliers ...[O]nly ...purchase when price is substantially below value, thus using a considerable "margin of safety". The security should be sold when price begins to exceed value by a given proportion. ...[P]articularly at times when the market is low, a sufficiently large number of under-priced securities will exist ...This insight is perhaps his most unusual one. ...[U]nderpriced shares almost disappear when the market is historically high, and reappear when it falls."
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Benjamin Graham
1894 – 1976
Benjamin Graham (May 9, 1894 – September 21, 1976) was an influential economist and professional investor. Graham is considered the first proponent of Value Investing. Well known disciples (students and teaching assistants) of Graham include Warren Buffett, William J. Ruane, Irving Kahn, Walter Schloss, and Charles Brandes. Buffett, who credits Graham as grounding him with a sound intellectual investment framework, described him as the second most influential person in his life after his o
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