Benjamin Graham was an eminent investor whose study in securities provided the framework for in-depth fundamental valuation employed in stock analysis today by all market participants. His best-selling book, The Intelligent Investor, is widely regarded as the cornerstone work in value investing.
Who Exactly is Benjamin Graham?
Benjamin Graham was born in London, England, in 1894. His family came to America when he was a child, and they lost their wealth during the Bank Panic of 1907. Graham went to Columbia University on a scholarship and took a job offer on Wall Street with Newburger, Henderson, and Loeb following graduation.
He was making almost $500,000 per year by the age of 25. Benjamin Graham lost virtually all of his assets in the 1929 stock market crash, but it taught him some critical lessons about the financial world. His insights following the catastrophe prompted him to collaborate with David Dodd on a study book titled Security Analysis. Irving Kahn, one of America’s most successful investors, also contributed to the book’s research materials.
Benjamin Graham is widely regarded as the father of stock analysis and, in particular, value investing. According to Graham and Dodd, value investing is the process of determining a common stock’s intrinsic worth irrespective of its market price. The intrinsic value of a stock may be calculated and compared to its market value utilizing a company’s fundamentals, such as assets, profits, and dividend distributions. If the intrinsic value exceeds the current price, the investor should purchase and keep it until the mean reversion happens.
The notion of mean reversion states that the market and intrinsic prices will converge over time until the stock price represents its real worth. When an investor purchases an undervalued stock, he or she is effectively paying less for it and should sell whenever the price is trading at its intrinsic value. In an efficient market, this impact of price convergence is unavoidable.
What is Benjamin Graham’s Net Worth?
According to several sources, Benjamin Graham’s net worth was estimated to be over $20 million at the time of his death in 1976. While this is a substantial figure, it is crucial to remember that Benjamin Graham‘s influence in the area of investing and hiscontributions to the creation of value investing extend far beyond his net worth.
