Ben Graham: Buy in less favorable conditions
The man who is sure improvement is coming can buy in current less favorable conditions, and thus derive the full benefit of the betterment (if it materializes).
– Benjamin Graham
Benjamin Graham was the father of value investing and Warren Buffett's mentor and inspiration. Graham pioneered the use of metrics like price-to-earnings (P/E) ratios, debt-to-equity ratios, and dividend records.
Graham's investment firm, Graham-Newman Corp., significantly outperformed the market with returns of more than 20% annually during the Great Depression, World War II, and the Korean War: between 1936 and 1956.
Even as the market looks increasingly unstable, we can find reassurance in these words from the legendary Ben Graham. When prices fall, yet you still believe in the inherent value of the companies whose shares you buy, you can expect to profit when their shareprices recover.
Graham didn't see any advantage in trying to buy at the absolute bottom, or in worrying that prices might swing lower after you purchase. As long as you can get the shares at a big enough discount from your fair price to provide a margin of safety, you have done your job. He never said "buy the dip," but he may have inspired it.
To learn more from Graham, start with his book, The Intelligent Investor. Warren Buffett calls it "by far the best book about investing ever written." Enough said.
If, after reading that, you want more, I suggest his other book, Security Analysis: Principles and Techniques. He first published it in 1934 and it has become one of the most influential financial books ever written. The latest edition includes updates on value investing by James Grant, Roger Lowenstein, Howard Marks, and others.
Stay tuned for more newsletters like this from My Daily Oracle in your inbox.
Disclaimer: This newsletter is for informational purposes only and does not constitute financial advice. Please consult a qualified financial advisor before making any investment decisions. Links on this page may be affiliate links, meaning your purchases help support this newsletter. Quotes may be edited slightly for clarity. Images represent our best effort. Copyright © 2025 mydailyoracle.com. All rights reserved.