Investing

Warren Buffett Story [Part 13] The Father of Value Investing

In the previous article, it was mentioned that Warren Buffett chose to attend Columbia University after reading Graham's book. We were taught about value investing by Graham, who is regarded as the founder of this investment approach.

Benjamin Graham, the father of value investing, believed that speculation occurs when investors base their decisions on the actions of other investors, without considering the fundamentals of the business. In contrast, true investors focus on analyzing the company behind the stock to determine its intrinsic value. By paying attention to the company's profitability, financial status, and future development trends, investors can explore the intrinsic value of the company, which will not be influenced by Mr. Market's consideration.

Warren Buffett, who studied under Graham at Columbia University, credited him with introducing the concept of value investing to the world. Graham's book, "Security Analysis," contains a set of fruitful analysis theories on marketable securities, making it a "Wall Street Bible" for investors. Buffett considered Graham his mentor and learned a great deal from him before putting his value-investing strategy into practice and achieving outstanding results.

Graham's investment strategy emphasizes three key principles: always invest with a margin of safety, expect volatility and profit from it, and know what kind of investor you are.


These principles provide practical operating principles and encourage knowledgeable investors to get on the value investing train. By following these principles and analyzing a company's fundamentals, investors can make informed investment decisions and generate sustainable returns over the long term.

Warren Buffett attended Columbia University's business school and was pleased to discover that most of his 20 classmates were already working as financial professionals on Wall Street. Despite being one of the youngest students in the class, he was not intimidated and approached his studies with dedication. He was particularly enthusiastic about asking questions and preparing for class, and he would readily raise his hand to ask questions whenever he needed clarification.

After graduating, Buffett returned to his hometown and worked as a stockbroker for three years before finally working with Graham. He began to learn a lot of practical experience until Graham retired in 1956. At that time, Buffett felt that he had completed his studies and was inspired to return to his hometown to start his own business. He also took note of the value investment strategy taught by Graham and put it into practice in the market and obtained excellent results. 

The most compelling evidence of Warren Buffett's investment prowess is his annual operating income, which has consistently outperformed the general market trend. He is truly an exceptional investor.

According to Warren Buffett, learning from a master for a few hours is more beneficial than working hard on your own for a decade. He acknowledges that his investment success is due to the wisdom of his mentor, Graham, and the combination of his theories and personal experience in the market. Buffett emphasizes that he trusts only in the market laws and correct investment principles discovered by Graham.

Watch out for the next part of this series!

Learning from other people’s experiences is key.  Although we might not exactly be able to tap Warren Buffett or Benjamin Graham directly for mentorship, there are communities available that are willing to help out both rookie and tenured investors

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Further Reading