Group members Name Rohit Parad Vikramsingh Kaintura Neha Sahani Aniket Sulakhe Prathmesh Vernekar Chirag Gohil
Roll No. 12115B0002 12115B0006 12115B0026 12115B0033 12115B0041 12115B0046
Buffett. He completed his graduation getting second class marks in the year 1914. credits Graham for teaching him with a sound intellectual investment framework. Schloss and others. Earlier his family was living a very lavish and luxurious life. named their sons Howard Graham Buffett and Thomas Graham Kahn after him. But his father passed away in 1903 & their business stumbled and their financial health also started declining. He is known as the father of value investing and he is a mentor to warren Buffet. He is also an author of two investment classic books one of them is Security Analysis. As soon as he graduated he was offered a job to become a faculty in three department viz. William J. Walter J. Graham's followers include Warren Buffett. Introduction He was born on 9th may 1894 in London. And the other one is “The Intelligent Investor “published in 1949.S when he was just 1 year old. maths & philosophy. Buffett and Kahn. was published in the year 1934 and that has been considered as a bible for serious investors since it was written. He was just 20 years old when he got such an enviable offer to become a faculty. In fact. and considers him as the second most influential person in his life after his own father.
His investment career
. But he refused to do so. He was good in studies hence he got the scholarship in Columbia university and performed brilliantly. His family migrated to U. which he wrote along with David Dodd.english. These are his two most widely acclaimed books.Benjamin Graham – The father of value investing
Benjamin Graham is a British-born American economist and professional investor. Ruane. Irving Kahn. Graham had such an overwhelming influence on his students that two of his students. His father was a dealer in china dishes and figurine.
a return of almost a 70%. an investors has two real choices the first one is to make serious commitment in time and energy to become a good investor who spends time on analysing the fundamental of business and company to earns an expected return and if this is not possible for an investor then the other choice is to invest in less risky securities and earn less return.7% after accounting for fees).2% return. As hardly some attention was paid on fundamental of the business of the company. From 1936 until his retirement in 1956 Graham Newman Corporation the partnership firm gained almost 20% annually (14. He believes that people should know the fact that whether they are investors or speculators. Northen pipelines stock price at that point of time was $65 a share. He says there is always an intelligent speculation and also intelligent investment but one should understand in what he/she is good at. the more work you do the more profit and return you enjoy. But during the crash of 1929-32 he lost 70% of his portfolio but yet with the help of his method he was doing better when market was still pessimistic. He explains the difference between speculators vs. held at least $80 a share in high quality bonds. Earlier dealing in securities was just a speculation business but he pioneered the science of investing as against speculation. investor Not all the people in the stock market are investors. Three year later he walked away with $110 a share. He started as a clerk in a bond trading firm then an analyst and then partner and finally he started his own investment partnership firm. Graham exploited this discrepancy by buying the stock and persuading the management to raise the dividend.In spite of such a nice offer he chose Wall Street over being a faculty. Ex. In 1925. He turned the academic notion of risk=return by saying work=return.
. According to him. An investor looks at a stock as a part of a business and the stakeholder as the owner of the business. Northen pipeline co. whereas speculator is the one who plays with expensive piece of paper with no intrinsic value. in the course of his research he came across some interesting findings. This was the great performance Wall Street has ever seen when rest of the market was giving 12.
Other times. • Defensive. His strategy was to preserve a capital and then try to make it grow.
His principle Buying a stock in a company is like buying the business Know your investing style Active and passive which can also be explained as defensive an enterprising. Investing in stocks means dealing with volatility.He also said to divide investment in stocks and bonds.the one who does not do any research and earns average returns. Market offers investors a daily price quote at which he would either buy an investor out or sell his share of the business. If you have proper research then definitely someday or the other market will correct itself and you will get fair returns. Graham illustrated this with the analogy of “Mr. Mr.
Use market fluctuation to your advantage. Market’s views dictate your own emotions or. he will be depressed about the business’s prospects and will quote a low price. he will be excited about the prospects for the business and quote a high price. Because the stock market has these same emotions. Market. the smart investor greets downturns as chances to find great investments. He suggested having 25% to 75% investment in bond varying this on market condition this helps to stop an investor from being a speculator.do not panic and sell your stock just because your stock is undervalued. the lesson here is that you shouldn’t let Mr. • Enterprising – the one who does analysis and hopefully earns higher return. This will help in avoiding market down turn by achieving growth of capital through bonds income. Sometimes.
.” the imaginary business partner of each and every investor. Instead of running for the exits during times of market stress.
When stocks are chosen carefully. use it to your advantage to get bargains in the market or to sell out when your holdings become way overvalued. which is thought to not only provide high-return opportunities but also to minimize the downside risk of an investment. what would be the highest return that company can give and that’s how you can reduce risk. Put another way. Margin of safety is the principle of buying a security at a significant discount to its intrinsic value. Instead. It also provides protection on the downside if things don’t work out as planned and the business falters. you should only buy when the price offered makes sense and sell when the price becomes too high. This concept is very important for investors to note. the market will fluctuate– sometimes wildly–but rather than fearing volatility.
. Furthermore. The safety net of buying an underlying business for much less than it is worth was the central theme of Graham’s success. as value investing can provide substantial profits once the market inevitably re-evaluates the stock and raises its price to fair value.worse. Always use margin of safety – how much return you want as per your analysis. lead you in your investment decisions. Graham found that a further decline in these undervalued equities occurred infrequently. you should form your own estimates of the business’s value based on a sound and rational examination of the facts.