Benjamin Graham (May 9, 1894 – September 21, 1976) was a British-born American economist, professor, and investor, widely known as the "father of value investing." His work laid the foundation for modern security analysis and investment philosophy. Graham taught at Columbia Business School for nearly three decades, where his students included Warren Buffett, who later called him the second most...
"There should have been an increase of at least one-third in per-share earnings over the past ten years."
Require at least one-third earnings growth over ten years to confirm the business has genuine forward momentum.
Read Full Analysis →"The product of PE and PB should not exceed 22.5."
Multiply PE ratio by PB ratio and reject any stock where the product exceeds 22.5.
Read Full Analysis →"Current price should not be more than 1.5 times the book value last reported."
Only buy stocks priced at no more than 1.5 times book value to ensure a tangible asset backing.
Read Full Analysis →"The current price should not be more than 15 times average earnings of the past three years."
Limit stock purchases to those trading at no more than 15 times their three-year average earnings.
Read Full Analysis →"A record of continuous dividend payments for at least 20 years is a favorable factor."
A track record of uninterrupted dividends over twenty years signals financial strength and management discipline.
Read Full Analysis →"The analyst's conclusions must always rest upon figures and upon established tests and standards."
Investment analysis must be grounded in quantitative data and standardized tests, not subjective opinions.
Read Full Analysis →"In the financial markets, history repeats itself in a never-ending cycle of boom and bust."
Market cycles of overvaluation and undervaluation repeat endlessly as human psychology remains constant.
Read Full Analysis →"A stock is cheap when it sells at a price below its net current asset value."
Stocks trading below net current asset value offer a quantifiable margin of safety with built-in downside protection.
Read Full Analysis →"It is better to be roughly right than precisely wrong."
Use conservative valuation estimates because approximate accuracy beats false precision in investing.
Read Full Analysis →"Intrinsic value is that value which is justified by the facts."
Intrinsic value must be grounded in verifiable financial facts, not projections or market sentiment.
Read Full Analysis →"Price is what you pay, value is what you get."
Distinguish sharply between market price and underlying business value to avoid overpaying for assets.
Read Full Analysis →Benjamin Graham has 11 key principles on value assessment. The most important one is "Earnings Growth" — There should have been an increase of at least one-third in per-share earnings over the past ten years.
Benjamin Graham applies value assessment through several key principles including "Earnings Growth" and "Graham Number". These principles guide practical investment decisions and have been tested across decades of market cycles.
Benjamin Graham's approach to value assessment is distinguished by a focus on long-term thinking and fundamental analysis. With 11 specific principles in this area, Benjamin Graham provides a comprehensive framework that investors at any level can study and apply to improve their decision-making.
