Benjamin Graham is often referred to as "the father of investing" - and for good reason.


Although Graham started working at Columbia Business School in 1928, his works and teachings - which include Security Analysis (published in 1934) and The Intelligent Investor (published in 1949) - remain as relevant and useful today as they did 65+ years ago.

And yet, as Andrew Hunt (portfolio manager and author of Better Value Investing) points out, Graham's works and teachings were not the last word on value investing.


Therefore, to really understand Ben Graham, you have to meet the whole family.

Vintage Value Investing

The above graphic, which I adapted from an article by Andrew Hunt, shows the different ways that Ben Graham's ideas have been used over the past 6+ decades.



  • Those who developed Graham's principles of valuation (namely Warren Buffett and Charlie Munger): Many of Graham's tools - such as liquidation value - were pretty crude. Investors like Warren Buffett and Charlie Munger refined them by applying additional factors - such as franchise value, management quality and capital allocation - in the assessment of intrinsic value.
  • Researchers who have back-tested and proved Graham's theories on cheap stocks (such as net-nets, low P/E, and low P/B stocks): In Graham's day, the computing power was not there to thoroughly check his quantitative theories. However, beginning in the late 1970s with Eugene Fama and Kenneth French, many researchers have since found that buying cheap stocks is incredibly effective.

Warren Buffett speaks at Fortune's Most Powerful Women Summit in Washington
Thomson Reuters


Graham's observations often hinted at the human difficulties of investing ("the investor's greatest enemy is likely to be himself"). The next generation of children - the "grandchildren" - (in red) answered the question of why the opportunities that Ben Graham found in the stock market existed at all.

There are four branches of explanation (which aren't at all mutually exclusive):

  • Neuropsychology: A growing area related to behavioral finance, neuropsychology explains how decision-making can become impaired due to chemical imbalances in the brain. For example, cortisol - a natural chemical released in response to stress - impair both the learning function and the ability to assess probabilities, while dopamine can cause investors or traders to take on excessive risk. Writers such as John Coates and Jason Zweig have written some fascinating books, articles, and YouTube videos applying neuropsychology to financial markets.

Seth Klarman, president and CEO of the The Baupost Group
Getty Images/ Scott Olson


Finally, Benjamin Graham's "great-grandchildren" (in green) have focused on how best to develop your organization or your own personality in order to overcome the obstacles explained by his "grandchildren" and to put value investing concepts into practice like Graham's "children".

Hunt notes that this is the youngest and most dynamic area in the evolution of Graham's teachings, and encompasses a very broad range of theories and thinkers:

  • Organizational Culture: Some of the most successful long-term value investment firms have written extensively on how to create the right culture and attract the right clients to make value investing possible. Some of the clearest examples are Howard Mark's memos at Oaktree, Seth Klarman's writings and talks on his Baupost Fund, and Richard Lawrence's presentations at Overlook Partners.
  • Checklists: Other value investors - most notably Mohnish Pabrai - have espoused using checklists as a key part of their value investing process. Checklists are an innovation borrowed from the airline industry and described by surgeon Atul Gawande in his best selling book, " The Checklist Manifesto". Simple and objective checklists can be used by investors to cut out their most common mistakes and omissions.
  • Intellectual Development: Finally, there are popular blogs like Farnam Street that focus on personal development and decision making, drawing on everything from the writings of Graham, Buffett, and Munger to Greek philosophy and quantum physics. And there are investors like Guy Spier, whose book " The Education of a Value Investor" deals almost exclusively with developing the right personality and temperament to invest successfully.


Well, value investing has recently found its way into sports.

As made famous in the book and then movie Moneyball, Billy Beane's strategy of using certain statistics like on-base percentage and slugging percentage - rather than the more popular and headline-grabbing stats like number of home runs and stolen bases - to find baseball players that were "undervalued" by other teams allowed the Oakland Athletics to become one of the best teams in baseball on a payroll that was only a third the size of many other teams'. This strategy has since been replicated by other professional sports teams.