Benjamin Graham
Mentor & Intellectual Father
Professor at Columbia Business School; Buffett's most influential teacher and early employer at Graham-Newman Corp.
Biography
Benjamin Graham (1894–1976) was the father of value investing and Warren Buffett's most influential intellectual mentor. Buffett studied under Graham at Columbia Business School, where he is the only student Graham ever awarded an A+. He later worked at Graham-Newman Corporation before launching his own partnership in 1956.
Graham's two seminal works — Security Analysis (1934, with David Dodd) and The Intelligent Investor (1949) — established the intellectual scaffolding Buffett built his career upon. Buffett calls The Intelligent Investor "by far the best book about investing ever written," and considers Chapter 8 (on Mr. Market) and Chapter 20 (on the margin of safety) "the bedrock of my investing."
Graham's core insight: stocks are ownership stakes in real businesses, not ticker symbols. Mr. Market is your servant, not your guide — use his mood swings to your advantage, never let them drive your decisions.
Key Stories
The Only A+ Student — Buffett has said that Graham gave him more than anyone except his father. In the classroom at Columbia, Graham created an environment of Socratic inquiry into business value that permanently shaped how Buffett thinks.
"The Margin of Safety" — Graham's most durable concept. Buy securities at a significant discount to intrinsic value, and you have a cushion for errors in analysis and bad luck. Buffett has carried this principle throughout his career, even as he evolved beyond pure Graham-style investing.
Evolving Beyond Graham — Buffett eventually moved past Graham's strict "cigar butt" approach — buying cheap regardless of business quality — partly under Munger's influence. But he never abandoned Graham's fundamental principles: value orientation, margin of safety, and the Mr. Market mental model. Buffett frequently says that "knowing what you don't know" — Grahamian intellectual humility — is as important as knowing what you do know.
Impact on Berkshire
Graham's impact on Buffett — and through Buffett on Berkshire — is immeasurable. Every element of Berkshire's investment philosophy traces back to Graham:
Intrinsic Value: The concept that a business has an underlying economic value independent of its stock price is pure Graham. The entire analytical framework Berkshire uses to evaluate acquisitions flows from this.
Mr. Market: Buffett uses this allegory in nearly every decade of his letters. It remains the best mental model for maintaining emotional discipline during market extremes.
Temperament over IQ: Graham taught that successful investing is more about character than intelligence — avoiding panic and greed is more important than finding the perfect formula. Berkshire's long-term holding philosophy is an expression of this Grahamian lesson.
Key Passages from Buffett's Letters
The Intelligent Investor”, by Ben Graham - the last section of the last chapter begins with, “Investment is most intelligent when it is most businesslike.” This section is called “A Final Word”, and it is appropriately titled.) We will emphasize again that there is unquestionably some risk in the WPPSS commitment. It is also the sort of risk that is difficult to evaluate. Were Charlie and I to deal with 50 similar evaluations over a lifetime, we would expect our judgm
Ben Graham told a story 40 years ago that illustrates why investment professionals behave as they do: An oil prospector, moving to his heavenly reward, was met by St. Peter with bad news. “You’re qualified for residence”, said St. Peter, “but, as you can see, the compound reserved for oil men is packed. There’s no way to squeeze you in.” After thinking a moment, the prospector asked if he might say just four words to the present occupants. That seemed harmless to St. Peter
*Ben Graham, my friend and teacher, long ago described the mental attitude toward market fluctuations that I believe to be most conducive to investment success. He said that you should imagine market quotations as coming from a remarkably accommodating fellow named Mr. Market who is your partner in a private business. Without fail, Mr. Market appears daily and names a price at which he will either buy your interest or sell you his. Even though the business that the two *
Dan Burke at Cap Cities, Bill Snyder and Lou Simpson at GEICO, and Kay Graham and Dick Simmons at The Washington Post. Charlie and I appreciate enormously the talent and integrity these managers bring to their businesses. Their performance, which we have observed at close range, contrasts vividly with that of many CEOs, which we have fortunately observed from a safe distance. Sometimes these CEOs clearly do not belong in their jobs; their positions, nevertheless, are u
Ben Graham in 1936. Alas, excesses similar to those he then lampooned have many 2022/4/7 Chairman's Letter - 1990 times since found their way into the financial statements of major American corporations and been duly certified by big-name auditors. Clearly, investors must always keep their guard up and use accounting numbers as a beginning, not an end, in their attempts to calculate true "economic earnings" accruing to them. Berkshire's own reported earnings are misle