Meet Benjamin Graham: The Teacher Behind the Greatest Investors

Ruin, remembered

Graham's father died when he was nine; the family savings went into a margin account in his mother's name, and the Panic of 1907 took it. He never forgot standing in a bank while a teller questioned whether his mother's check was good. The whole edifice he later built — buy with a margin of safety, treat speculation and investment as different activities, never depend on the market's mood — is that boyhood, converted into method.

Mr. Market, the manic partner

His most durable teaching is a story. Imagine a business partner — Mr. Market — who every day names a price at which he will buy your share or sell you his. Some days he is euphoric and quotes absurdly high; some days he is despairing and quotes absurdly low. You are free to ignore him entirely. His moods are your opportunity, never your instruction. Half of investing — half of deciding — is remembering which of you is supposed to be sane.

The teacher's return

Graham taught at Columbia for nearly three decades, and gave his method away in Security Analysis and The Intelligent Investor. One student earned the only A+ he ever awarded, came to work for him, and named a son after him: Warren Buffett, who still calls chapter 8 and chapter 20 — Mr. Market and the margin of safety — the best things ever written about investing.

Why they belong at your table

Seat him for any decision where emotion and value have come apart — a purchase, a career move, a market panic. He will ask what the thing is worth, what you are paying, and which of you is being sane.