The Intelligent Investor - Benjamin Graham

[Archives] Benjamin Graham: Securities In An Insecure World


Full text from Benjamin Graham’s lecture delivered at Town Hall St. Francis Hotel titled, “Securities In An Insecure World,” from November 15, 1963.

Benjamin Graham: Securities In An Insecure World

[Archives] Benjamin Graham: Securities In An Insecure World

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  • Serenity Stocks

    Buffett describes Graham’s book – The Intelligent Investor – as “by far the best book about investing ever written” (in its preface).

    Quoted from Chapter 14 of The Intelligent Investor – Stock Selection for the Defensive Investor:
    “In setting up this diversified list he has a choice of two approaches, the DJIA-type of portfolio and the quantitatively- tested portfolio. In the first he acquires a true cross-section sample of the leading issues….[shortened]… This could be done, most simply perhaps, by buying the same amounts of all thirty of the issues in the Dow-Jones Industrial Average.”

    You can see Graham make the same point again in this lecture (Page 8, paragraph 1).

    Benjamin Graham – also known as The Dean of Wall Street – was a scholar and financial analyst who mentored legendary investors such as Warren Buffett, William J. Ruane, Irving Kahn and Walter J. Schloss.

    Warren Buffett once wrote a detailed article explaining how Graham’s record of creating exceptional investors (such as Buffett himself) is unquestionable, and how Graham’s principles are everlasting. The article is called “The Superinvestors of Graham-and-Doddsville”.

    Benjamin Graham’s first recommended strategy – for casual investors – was to invest in Index stocks.
    For more serious (Defensive and Enterprising) investors, Graham recommended three different categories of stocks – Defensive, Enterprising and NCAV – and 17 rules for identifying them.
    For advanced investors, Graham described various “special situations”.

    The first requires almost no analysis, and is easily accomplished today with a good S&P500 Index fund.
    The last requires more than the average level of experience, intuition and talent. Such stocks are not amenable to impartial quantitative analysis, and require a case-specific approach.

    But Defensive, Enterprising and NCAV stocks can be reliably detected by today’s data-mining software, and offer a great avenue for detailed objective analysis and profitable investment.

    April 8, 2015 at 4:51 pm

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