Benjamin Graham is considered the father of value investing. His ideas shaped Warren Buffett and many of the world’s best investors. Graham taught that investing should be grounded in facts, discipline, and protection against loss—not emotion or speculation.
1. A Stock Is a Piece of a Business
Graham shifted Wall Street away from treating stocks like lottery tickets.
He taught that behind every share is a real business with assets, earnings, and customers.
The lesson:
invest based on business fundamentals, not price movements or headlines.
2. The Margin of Safety
Graham’s most famous principle:
only buy investments when they are priced well below their true value.
This buffer protects you if:
•your analysis is wrong
•the economy changes
•the company suffers a temporary setback
The goal isn’t to predict the future perfectly — it’s to build room for error.
3. Intrinsic Value: What a Business Is Really Worth
Graham emphasized estimating what a company would be worth if you owned the whole thing.
Key inputs:
•earnings
•assets
•dividend power
•long-term earning capacity
If the market price is far below this value, you have an opportunity.
If it's above, you avoid it.
4. Mr. Market: Don’t Follow His Moods
Graham personified the stock market as “Mr. Market” — emotional, unpredictable, and often irrational.
Some days he offers high prices, other days low.
Your job is not to agree with him but to take advantage of his mistakes.
The lesson:
don’t confuse market opinion with business reality.
5. Investing Is Not Speculation
Graham drew a clear line:
•Investing = analyzing cash flows, assets, and value
•Speculating = hoping price moves in your favor
His advice for most people:
if you can’t analyze businesses deeply,
own simple, low-cost index funds instead.
6. Discipline Beats Emotion
Graham believed temperament is more important than IQ.
Great investors control:
•fear during downturns
•greed during booms
•impatience during volatility
•overconfidence after wins
•Consistency and rationality win over excitement.
