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- HX Weekly: September 21 - September 25, 2026
HX Weekly: September 21 - September 25, 2026
The Father of Value Investing
Hello reader, welcome to the latest issue of HX Weekly!
This past week marked the 50th anniversary of the passing of legendary value investor, Benjamin Graham.
In his honor, we are sharing some of our thoughts on his legacy.
Enjoy the note and have a good weekend!
The Father of Value Investing
Benjamin Graham
In the pantheon of great investors there are many giants.
There are hedge fund titans like Steve Cohen, Julian Robertson, and George Soros. There are mutual fund masters like Peter Lynch, John Bogle, and Sir John Templeton.
Then there are the twin pillars of Berkshire Hathaway – Charlie Munger and Warren Buffett.
Standing above all of these, though, is a man who arguably was the father of VALUE investing.
His name was Benjamin Graham.
Graham was born as Benjamin Grossbaum in 1894 in London, England. The family moved to New York City when he was just one year old and, like many Jews of the time, changed their name as an act of assimilation.
Graham’s father died when he was young and the family fell into poverty. This traumatic experience would shape Graham’s future views as a value investor.
He entered Columbia University at the age of just 16 years old and graduated in just three and one-half years as salutatorian. Graham considered joining academia and had a brief career as a writer, before deciding to take a job on Wall Street to help support his widowed mother.
Beginning in 1936 he formed a private partnership called the Graham-Newman fund and ran it for the next two decades, positing an average +21% annualized return. This far outpaced the +12.2% return of the overall stock market over that time.
Graham is most well known for his two books, Security Analysis (1934) with David Dodd, and The Intelligent Investor (1949).
He laid the groundwork for the value investment philosophy and was influential on many well-known investors like Mario Gabelli, Seth Klarman, Howards Marks, John Neff, and Sir John Templetom.
Most famously, he was a mentor to Warren Buffett.
As Buffett said,
"And if encouragement or counsel was needed, Ben was there. Walter Lippmann spoke of men who plant trees that other men will sit under. Ben Graham was such a man."
Without a doubt, Graham has been one of the most influential investing minds of all time.
Here is some time-honored wisdom from him along with our thoughts. Enjoy.
“In the short run, the market is a voting machine, but in the long run, it is a weighing machine.”
This is arguably, Graham’s most famous quote.
His point is that in the short-term the price of a stock is primarily driven by human emotion. Traders will buy it and sell it based on the feelings of the moment.
Over the long term, however, the value of the underlying business plays the primary role in determining the share price.
“The intelligent investor is a realist who sells to optimists and buys from pessimists.”
This is one of my favorites of Graham’s quote.
Our view is that the “sell high” part of “buy low, sell high” is as important as the “buy low.” It is also much more difficult to execute.
Our successful trading strategies have been built on taking advantage of both excessive optimism and excessive pessimism in great stocks.
“While enthusiasm may be necessary for great accomplishments elsewhere, on Wall Street, it almost invariably leads to disaster.”
THIS is something for us all to consider right now with the current boom in AI.
Enthusiasm is necessary to build a business.
Unlike the real world, though, excessive enthusiasm in the stock market can lead to unsustainable prices.
The early stages of enthusiasm are necessary to drive stock prices higher. Excessive enthusiasm is what eventually creates a BEAR market.
“To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks.”
This reminds me of one my favorite Warren Buffett quotes, “Investing is simple, but not easy.”
The reality is that we can all go out and buy index funds and consistently invest via dollar cost averaging. This will create strong results over time.
Those that are willing to do the work, though, can achieve life-changing results. That is what we are here to help with!
“The investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all, for he would then be spared the mental anguish caused him by other persons’ mistakes of judgment.”
Another quote focused on the benefits of long-term investing.
For our long-term investing strategies, we often recommend that our readers do NOT check the performance.
If your stock picking method is sound, you should not have to check very often.
With some simple risk controls, everyone can achieve superior returns with the proper plan and discipline.
We hope that you’ve enjoyed this week’s issue of HX Weekly…
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