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Benjamin Graham

Benjamin Graham

8 books

finance

What they argue

Benjamin Graham is a thinker who operates in the territory of value investing and financial analysis. He focuses on the distinction between investment and speculation, advocating for a disciplined, systematic approach to determining a business's intrinsic value.

  1. Investment vs. Speculation

    An investment is an operation that, upon thorough analysis, promises safety of principal and an adequate return. Speculation is buying something in the hope that the price will go up without such analysis.

    From The Intelligent Investor (book)

    • Says much the same Joel Greenblatt — The Difference Between Investing and SpeculatingInvesting is the purchase of a piece of a business with the expectation of a return based on the business's actual performance. Speculating is betting on price movements.The Big Secret for the Small Investor

  2. Intrinsic Value vs. Market Price

    Intrinsic value is the present value of all future earnings and assets owned by a company. Market price is simply what people are currently willing to pay for those things in a chaotic environment.

    From Security Analysis (book)

    • Says much the same Aswath Damodaran — Intrinsic Value vs. Market PriceIntrinsic value is what a business is worth based on its fundamentals, while market price is what someone is willing to pay at a specific moment. These are rarely the…The Little Book of Valuation
    • Says much the same Jack D. Schwager — Intrinsic ValueIntrinsic value is the true worth of a company based on its actual business operations, independent of its current trading price. It is derived from the present value…Fundamental analysis

  3. The Margin of Safety

    Investing is a mathematical and psychological discipline of determining the 'intrinsic value' of a business and only purchasing it when the market price offers a sufficient 'margin of safety.'

    From Benjamin Graham on investing (book)

    • Says much the same Robert G. Hagstrom — Margin of Safety through Emotional HysteriaSuccessful investing is the art of identifying high-quality businesses with 'moats' and buying them only when the market's emotional hysteria creates a price that…The essential Buffett

  4. The Balance Sheet as a Snapshot of Reality

    The balance sheet represents the 'state of being' of a company at a specific point in time, equating Assets = Liabilities + Equity. It reveals the actual economic reality of a business by stripping away the 'noise' of market fluctuations.

    From The interpretation of financial statements (book)

  5. Price vs. Value

    Because humans are governed by fear and greed, the market price of a stock will constantly fluctuate wildly away from its actual worth. An intelligent investor must have the discipline to ignore these fluctuations and focus on the underlying value of an asset.

    From The Intelligent Investor (book)

    • Says much the same Aswath Damodaran — Intrinsic Value vs. Market PriceIntrinsic value is what a business is worth based on its fundamentals, while market price is what someone is willing to pay at a specific moment. These are rarely the…The Little Book of Valuation
    • Says much the same Joel Greenblatt — Market Inefficiency and Emotional BiasThe stock market is frequently inefficient because investors are often driven by emotion, herd behavior, and a focus on short-term price fluctuations. Because people…The Little Book That Still Beats the Market

  6. The Solvency & Liquidity Audit

    Investors should use a checklist before considering any investment to ensure the company won't collapse under its own weight. This includes checking the Current Ratio, which is Current Assets divided by Current Liabilities.

    From The interpretation of financial statements (book)

    • A related idea Joel Greenblatt — The 'Business Owner' AuditBefore buying any stock, investors should run a mental checklist to ensure they are thinking like an owner rather than a gambler. One specific test is the 'Store' Test:…The Big Secret for the Small Investor
    • A related idea Robert G. Hagstrom — The Moat Assessment ChecklistInvestors should evaluate a company's sustainable competitive advantage before looking at its stock price. This includes checking for Brand Power, which allows for…The Warren Buffet way

Every idea names the summary it came from. Written by a local model from this mind’s own work, never from memory.

Books 4

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