Born in London in 1894, his family moved to New York when he was one year old. He studied at Columbia University, and was offered several academic posts after he graduated at the age of 20, but took a job as a messenger in the bond department of Wall Street firm Newburger, Henderson & Loeb. Within six years he was a partner.
What wasthe strategy of Benjamin Graham?
He advised investors to focus on companies that traded on low multiples of price to earnings (ie, that were cheap compared to the profits they were making). But he particularly liked companies trading at less than the value of their net assets, which he called "cigar butts" (you might be able to get one last puff out of them).
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GEICO was trading at rock bottom, but Graham saw that the firm was cutting costs through selling by post, and it was also selling to low-risk customers. By 1956, GEICO's shares had risen nearly tenfold. Graham was also a key influence on Warren Buffett. Indeed, Buffett who Graham taught as a graduate student at Columbia was invited to take over Graham-Newman in 1956.
What other advice did he have for investors?
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