Benjamin Graham's Philosophy

Benjamin Graham is known as the "Father of Value Investing." His 1949 book "The Intelligent Investor" is considered the bible of investing and was Warren Buffett's primary education.

Key Principles

  • Mr. Market: The market is irrational - exploit its mood swings
  • Margin of Safety: Only buy when price is below intrinsic value
  • Quantitative Analysis: Focus on hard numbers, not stories
  • Defensive Investing: Protect capital first, grow it second
  • Diversification: Don't put all eggs in one basket

πŸ’‘ Did You Know?

Graham taught Warren Buffett at Columbia Business School. Buffett says reading Graham's book was like "seeing the world in color for the first time."

Screener Criteria

P/E Ratio
< 15
Earnings multiple
P/B Ratio
< 1.5
Price to book value
Dividend Yield
> 3%
Income component
Current Ratio
> 2
Liquidity measure
Debt/Equity
< 1
Conservative leverage

πŸ“Š Analyze Any Stock

Enter a ticker symbol to see how it measures up against Graham's criteria

Try: AAPL, MSFT, JPM, KO, PG, or any US stock ticker

Example Results

Companies matching Graham's criteria (for educational purposes only)

πŸ“š Educational Data Updated: Delayed data for learning purposes
Company Ticker P/E P/B Yield Current Margin
Bank of America
Banking
BAC 12.4 1.1 2.9% 2.4 High
Walgreens
Pharmacy retail
WBA 8.2 1.2 4.8% 2.8 High
Verizon
Telecommunications
VZ 9.1 1.8 6.7% 2.1 Moderate
Meets Criteria
Below Threshold
High Strong margin of safety

Deep Dive: Understanding Graham's Criteria

πŸ“ˆ Mr. Market

Graham's famous "Mr. Market" parable illustrates how the market is irrational - treat it as a manic-depressive business partner:

  • Emotional Swings: Market prices swing wildly based on fear and greed
  • Exploit the Mood: Buy when he's depressed (low prices), sell when he's euphoric
  • Price vs Value: Focus on intrinsic value, not market sentiment
  • Opportunity Knocks: Market volatility creates buying opportunities
  • Long-term Focus: Eventually, value is recognized by the market

πŸ›‘οΈ Margin of Safety

Only buy when price is significantly below intrinsic value - this is the cornerstone of defensive investing:

  • Buffer Zone: Buy at 50-60% of estimated value
  • Protection Against Errors: Even if your analysis is wrong, you still profit
  • Downside Protection: Limits losses if things go wrong
  • Patience Required: Wait for the right price - don't chase
  • Quantitative: Based on hard numbers, not stories

πŸ‘¨β€πŸ« Graham's Influence

Benjamin Graham is the father of modern value investing - his teachings shaped the greatest investors:

  • The Intelligent Investor: Published 1949, still the bible of investing
  • Warren Buffett: Graham's student, followed his principles to billions
  • Security Analysis: Co-authored with David Dodd, foundational textbook
  • Focus on Data: Emphasize financial statements over speculation
  • Legacy: Influenced generations of successful investors