I read the first edition of this book in the early 1950s, when I was nineteen years old. I thought then that it was the best book on investing ever written. I still believe that.Investing successfully throughout your life doesn't require a stratospheric IQ, extraordinary business insight, or insider knowledge. What it takes is an intellectual framework from which to make decisions and the ability to prevent emotions from corroding that framework. This book provides the proper framework precisely and clearly. You just have to develop emotional discipline.If you follow the behavior and business principles Graham advocates and if you pay particular attention to the invaluable advice in Chapters 8 and 20, you will not get bad results from your investments (you may get better than you thought you would). Whether or not you get exceptional results will depend on the level of intelligence you apply to investing as well as the idiosyncrasies of the market that dominate your investing career. The more idiosyncratic the market is, the better the chances are for the trading investor. According to Graham, you will benefit from these idiosyncrasies rather than be complicit in them.To me, Graham is more than a writer or a teacher. He has influenced my life more than any person except my father. Shortly after Graham died in 1976, I wrote a short remembrance of him in the Financial Analysts Journal. As you read this pamphlet, I am sure that Jap will also experience some of the characteristics I have mentioned in this acknowledgment.
A few years ago Ben Graham, then in his 80s, told a friend that every day he thought of 'something stupid, something creative, and something generous to do.'The first unique feature of his thought process was that he avoided any didactic or self-important tone in every sentence. Though his thoughts were powerful, their expressions were always gentle.Readers of this magazine need not be told in detail about his achievements. They can be measured by the level of his creativity. It is rare for a man who establishes a theory to not see it undone by his successors, even for a short time, but more than forty years have passed since the publication of this book, which gave structure and logic to an undisciplined and confused activity, yet it is hard to think of a second-place finisher in the field of securities analysis. In a field where much seems to be senseless within a few weeks or months after its publication, Bain's theories have remained solid. Their value often increases and is better understood when the financial storm destroys weak intellectual structures. Their perfection is an infallible gift to his followers, even to those who are not endowed with the natural equanimity of brilliant practitioners who have stumbled under brilliant machinations.The extraordinary aspect of Ben's dominance in his professional field is that he has not achieved it through some narrow mental activity in which all the effort is directed towards one side, but rather it is a relevant by-product of an intellect whose range is indescribable. Indeed, I have never met a man as intelligent. In all seriousness, his endless fascination with new knowledge, and his ability to reconstruct frameworks that apply to seemingly unrelated problems, make his thinking a delight for any field.But his third most important quality was generosity, in which he surpassed all others. I knew Ben as my teacher, employer, and friend. In every relationship he was completely open, with generosity of thought, time, and emotion immeasurable. The same was true of students, employees, and friends. If clarity of thought was needed, there was no better place to be. And if encouragement or advice was needed, Ben was always available. Walter Lippman talked about people who plant a tree under which others can sit. Ben Graham was such a man. Reprinted from Financial Analyst Journal, November/December 1976.
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