Trader Benjamin Graham
Benjamin Graham is one of the old-timers in the investment business, and his contribution to the development of future investors is simply enormous.
It was Benjamin Graham who became the teacher and inspirer of millions of traders around the world, and the most successful student of this trader was Warren Buffett himself.
Graham is the author of the so-called investor bible, in which Graham was the first to separate speculators on the stock exchange from investors, and also spoke in detail about his method of selecting certain stocks.
The track record of this trader and investor simply speaks for itself, but no less interesting is the life path of this great man, after reading which you can learn certain lessons for yourself.
Benjamin Graham was born on January 8, 1894. The future investor's first homeland was London, but when the young man was just over a year old, his parents decided to emigrate to the United States.
However, when Benjamin was only 9 years old, his father passed away. Starting from this period, a fairly rich family suddenly becomes poor, so Graham learned from childhood all the severity of poor life.
Trader training and career
A very difficult childhood, working with his hands and a constant regime of saving clearly hammered into his head the importance of education and a career, so Graham enters Columbia University and receives a bachelor's degree.
Teachers and management noticed Benjamin's talent and invited him to stay and work with them, teaching mathematics. However, at that same moment he was offered an internship and became an assistant in the bonds department of one of the firms on Walt Street.
Graham's career at Newburger, Henderson and Loeb grew rapidly, and six years later he became an official partner of the firm. So, recently a poor young man began to receive 2.5 percent of the company’s total profits, which was quite a large salary.
By the end of 1923, everyone on Walt Street already knew who Benjamin Graham was and how talented this young man was, so various proposals began to come in to found his own hedge fund.
One of the entrepreneurs offers Benjamin Graham $250,000 to manage, and he will be paid a monthly rate of $10,000, as well as 20 percent of the profits.
A lucky chance.
Naturally, Benjamin has no doubts and grabs luck by the tail, and quite quickly increases his capital to 500 thousand dollars.
After some time, Benjamin decides to set out on his own and establishes the Grahar Corporation fund with a capital of 500 thousand dollars.
The principle of the fund's operation was that Graham looked for undervalued shares and bought them, counting on their growth in the future. Graham also sold overvalued shares and made money on them in the short term.
The fund grew in capital very quickly, since until 1928 the fund's return was more than 27 percent annually. However, this was the dawn of mutual funds, and stocks were mushrooming in the rain, leading to the world-famous Economic Depression.
During the period of the Great Depression in the United States, the fund's assets were reduced by more than half, but at the end of the negative period, the fund returned to positive dynamics and began to bring its investors 17 percent per annum.
Author of a book about stock trading.
Trader Benjamin Graham did not take his work and achievements to the grave, but published a book called “Security Analysis” in 1934.
This manual has become a kind of bible for traders, since the book reveals the practical aspects of trading on the stock exchange.
Also in 1949, Graham published a book called “The Intelligent Investor,” which not only complemented the previous publication, but showed in practice how an investor can anticipate future price changes.
Benjamin Graham died on September 21, 1976 at the age of 82.