Graham studied at Columbia University where he was a student recognized and highly appreciated. Shortly after graduation, Benjamin Graham chose to work on Wall Street. In the next 15 years, the young investor has managed to create a rather large portfolio increased due to the attention to detail.
Known as the "father of smart investments" or "Dean of Wall Street", Ben Graham (1894-1976) managed to be appreciated in investments by cautious on the stock investments in their own interests and friends. This caution was based on well-considered investment strategy and to which he remained faithful throughout his career as a speculator.
The American had a very difficult period in time "stock crash," in 1929 and in the following period, after which he lost a large part of investments of approximately 70-80%. The problem was however that such investments represented and interests in investment funds which invest name. Graham managed to recover losses and to repay the taxpayers in the next four years.
After learning this hard lesson about risk, aa Graham wrote the "Analysis of shares" in 1934, giving its strategies and principles of valuation of shares of stock. This book is used until today, and known as the "Bible wise investor." In his career as a professor of investments, Ben Graham has published "intelligent investor" in 1949, which in turn managed to get popularity and a number of impressive sales.
Indeed, Graham's earnings failed to exceed the performance. Warren Buffett was discovered by him as a student, and who they collaborated later. Between 1929 - 1956, there was Great Depression and there were many heavy wars. Thus, Graham's investments had an average profitability of 17% per year.
Graham achieved objective assessment of future acquisitions in light of the figures, despite the subjectivity aspects of managerial type, trend, brand name or future products.
To better know the key to success in Ben Graham's investment, we present the following rules elementary maybe some readers:
1. Rate company - knows and appreciates the business in which you want to invest
2. Watch what kind of manager manages your company - after its acquisition
3. The purpose of any investment is profit
4. Be optimistic and do not listen to others
5. Know "safety margin" - the difference between quoted and actual value of the company. If this value is negative, do not invest
6. Choose as large companies with sales - because small companies do not survive economic collapse
7. Choose companies that distribute dividends
8. Choose companies with high liquidity
9. Future acquisitions must be registered lately positive profitability and steady rates
10. Watch the multipliers price - P / E, P / VC.
Benjamin Graham has devoted his entire career to the investor, furthering research and study of investment theory. Among those who followed his advice include Warren Buffett, John Bogle, John Neff, Mario Gabelli and Michael Price.
