Benjamin Graham: the ‘father of value investing’
Graham’s basic principles of value investing
- When you buy a stock, you are buying a share in a business.
- The market price of a stock is only an opinion of the value of the stock and does not necessarily reflect the real value of that stock.
- The future value of a stock is a reflection of its current price.
- An investor must always build a margin of safety into the decision to buy a stock.
- Intelligent investing requires a detached and long term approach, based on careful research and reason, and not on the opinions of others or the prospects of short term gains.