Thursday, February 21, 2019

Einstein of Money

Benjamin Graham was patron saint of value investing. His book, The Intelligent Investor, still pops up on best seller lists, decades after he passed away. Other investors, such as Warren Buffett see him as a significant influence on their investing style. Graham's investing style puts the focus on long term value, regardless of short term market fluctuations. Depending on the dedication of the investor, they can employ screens to narrow down the the list of companies to consider. (Doing these screens were much more difficult a century ago when he started investing.)
Einstein of Money interleaves the story of Graham's life with details of his investing framework. The structure almost works. However, it is easy to get lost as it shifts gears. The writing style can also be very patronizing. The author revere's Graham, and is willing to brush aside his failures (especially with women and family.) He regularly talks about Graham's strong ethics, but does not spend much time in giving positive examples.
Graham was born into a fairly well-to-do Jewish family that had immigrated to the US. The temporary time in New York ended up becoming a permanent residence. The family was initially very well to do. However, they became impoverished as the family business failed and his father passed away. Ben learned to work and study hard and value money. He ended up attending Columbia on scholarship where he studied a multitude of subjects. He expected to go to law school, but ended up with a job on Wall Street. He had great success, eventually starting his own firm and weathering through the great depression. He eventually retired to California, where he taught a class at UCLA on investing. In his "spare time", he had many interests. He wrote plays, translated a book from Spanish, and proposed an economic alternative to the gold standard. He did have trouble keeping a marriage together, and was married multiple times, eventually living the waning days of his life with a mistress. He lived most of his life comfortably, and continued to influence many investors, including Warren Buffett whom he hoped would continue to work at his firm after her retired. Alas, the "Oracle of Omaha" decided he would much rather be back in Nebraska once Graham was retired.

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