After graduating from Brooklyn Middle School, Graham was admitted to Columbia University for further study. Although he had to work under the pressure of survival and pay a lot of tuition fees during his study at Columbia University, he calmly faced the ups and downs of life, and under the guidance of a group of excellent tutors, he buried his head deeper in books and knowledge and constantly absorbed nutrition from knowledge. 19 14, Graham graduated from Columbia University with honors, ranking second in his class. However, in order to improve the family's financial situation, Graham needs to find a well-paid job. Therefore, he gave up the opportunity to stay in school and started to step into Wall Street on the recommendation of President Cabel.
19 14 Graham graduated from Columbia University. In the summer of the same year, Graham worked as an information officer in newberg Henderson Lauber Company, and was soon promoted to securities analyst.
19 14 In the summer, Graham worked as an information officer in newberg-Henderson-Lauber Company, mainly responsible for posting bond and stock prices on the blackboard, with a weekly salary of $65,438 +02. Although this job is one of the lowest jobs in new york Stock Exchange, the future godfather of Wall Street started his legendary investment career on Wall Street.
Graham quickly proved his ability to the company. In less than three months, he was promoted to the author of the research report. Because of his rich literary accomplishment, rigorous scientific thinking and profound knowledge, he quickly formed his own concise and logical writing style, which is unique in the securities analysis stage on Wall Street.
It is the newberg-Henderson-Lauber Company that provided Graham with a good practice and training place, which enabled the future stock master to become fully familiar with a set of management knowledge of the securities industry, and to understand the practical operation methods including securities trading procedures, market analysis, buying and shipping opportunities, stock market environment and stock market sentiment. Although Graham has no formal business school education, this experience from personal realization is far more profound and powerful than that described in books, which lays a very solid foundation for his future exploration of stock theory.
After careful observation, newberg, the boss of the company, found that Graham had great potential and talent. Soon, Graham was promoted to securities analyst. Being promoted to securities analyst is the real beginning of Graham's career.
At that time, people used to use Dow theory and Dow Jones index to analyze the stock market, but the analysis of individual stocks and securities was still in a relatively primitive and rough stage, and ordinary investors usually tended to invest in bonds. For stock investment, investors generally believe that speculation and risk are too great to grasp. On the one hand, investors make this choice because bonds have stable returns. Once the company that issues bonds goes bankrupt and liquidates, bondholders have priority over shareholders, and the safety factor of buying bonds is obviously higher than that of buying stocks. On the other hand, it is mainly because ordinary companies only publish general financial statements, which makes it difficult for investors to know their real financial situation. Through the financial statements of listed stock and bond companies, as well as the investigation and research on the assets of these companies, Graham found that listed companies often try their best to hide their assets in order to hide their profits or evade their responsibilities when clearing debts. The company's financial statements disclose undervalued assets. The direct consequence of this practice is that the stock price reflected by the stock market is often far below its actual value. Manipulators can control the rise and fall of stock prices by releasing news, and the stock market is completely in a state of near disorder and chaos.
Graham decided to start with a company that hides a lot of assets. He began to collect information from listed companies themselves, government management units, news reports, insiders and other channels, and searched for companies with a large number of hidden assets through research and analysis of these collected information.
1965438+In September 2005, Graham noticed that Geboheim Company, a mining development company with several copper mine shares, had a share price of $68.88 at that time. After learning the news that the company was about to be dissolved, Graham collected the relevant information of the company through various channels, made a detailed technical analysis of the company's minerals and share price, and found that the company still had a large number of unknown hidden assets. Through calculation, Graham accurately judged that there was a huge price difference between the market value of the company's stock and the actual asset value. He thinks that investing in the company's stock will bring rich returns, and suggests that Mr. newberg buy the stock in large quantities. Mr newberg accepted Graham's suggestion. When the company was dissolved in June, newberg Henderson Lauber made hundreds of thousands of dollars in profits from this transaction, and its return on investment was as high as 18.53%.
As a securities analyst, Graham became famous on Wall Street because of his accurate judgment on investing in stocks. He decided to try his hand on Wall Street.
At the invitation of some relatives and friends, he began to try to invest in some private individuals. At first, Graham's private investment did get a good return, but the "Sava Tire Incident" that happened one year later brought a heavy blow to Graham.
At that time, there was a secret operation on Wall Street, which was to buy shares of companies that were about to go public, and then arbitrage after the company went public. A friend of Graham told him that the stock of Sapu Tire Company will be listed soon. Without careful analysis, Graham joined a group of colleagues and friends and bought shares of Sapiain Tire Company in batches. However, subscribing for these stocks is purely market manipulation. After speculating in the stock price, the behind-the-scenes manipulator suddenly sold it, which led to a large number of investors, including Graham, being ruthlessly trapped, and finally the stock could not be listed.
"Saping Tire Incident" gave Graham a vivid lesson and made Graham have a deeper understanding of the nature of Wall Street. At the same time, Graham has learned two lessons from it: one is that he can't believe the so-called "inside information", and the other is that he should be highly alert to man-made manipulation of the market. All these have prompted Graham to gradually mature.
1920 Graham became a partner of newberg Henderson Robert. He continued to accumulate more experience through practice. With his brilliant victories one after another, his investment technology and investment philosophy are becoming more and more mature.
In Graham's view, speculation is not a good investment, because speculation is based on news and its risk is very high. When the stock price has risen to the upper end of the high-end, it is hard to say which stock is not at risk of falling, even blue-chip stocks are no exception. Therefore, strictly speaking, the risks involved in fact-based investment and news-based speculation are completely different. If a company is really well run, the investment risk contained in its stock will be very small, and its future profitability will be higher. At the same time, Graham also believes that risks will always exist in the stock market. Without risk, there would be no stock market. Any investor who wants to succeed needs to rely on effective skills to avoid risks and make profits. Graham used options trading to avoid investment risks and designed a systematic insurance scheme for his portfolio. For example, when a security is bullish, he only spends a little money to buy the option he wants to buy, and then buys it at a low price at the agreed price when it appreciates in the future; When a security is bearish, buy a small amount of its put option so that it can be sold at a high price after falling in the future. Option trading can take advantage of its leverage to make large-scale bets, which makes it possible to profit from investment regardless of market trends. Even if you misjudge the trend of securities prices, the loss will be limited to a small sum of money invested in options at most, and will not plummet.
For investors who are always worried that their investment will be lost due to the vagaries of the securities market, Graham's risk aversion technology is undoubtedly a perfect solution. Graham thus established his own unique reputation on Wall Street.
1923 At the beginning of this year, Graham left newberg-Henderson-Lauber Company and decided to start his own business. He founded the Granci Private Fund with a capital of $500,000. Graham decided to make great achievements on this basis. The first target he chose was DuPont, a famous American chemical giant.
At the beginning of 1923, Graham left newberg Henderson Lauber Company. He founded the Granci Private Fund with a capital of $500,000.
1920, DuPont, an American arms giant, took advantage of the financial difficulties that General Motors could not repay the bank loans temporarily, and finally merged General Motors through a long-planned merger war. The merger of DuPont and General Motors has formed a cross-shareholding situation between the two companies. 1923 Around August, due to the end of World War I, the American economy entered a recovery, DuPont lost the source of arms profiteering, and its share price fell sharply, and its share price only remained at around $297.85. On the other hand, due to the increasing demand in the automobile market, the profit of General Motors soared, and its share price was as high as $385.
Graham noticed that there was a big gap between DuPont and General Motors. After analysis, he believes that because DuPont holds more than 38% of GM's shares, and this share is still increasing, the price gap between the two stocks in the market at this stage is a mistake, and the mistakes caused by the stock market will be corrected sooner or later by the stock market itself. It is impossible for the market to turn a blind eye to obvious mistakes for long. Once this mistake is corrected, it is time for discerning investors to make a profit.
Graham not only bought a lot of DuPont shares, but also sold a lot of GM shares. In this way, he will benefit from DuPont's stock rising and General Motors' stock falling. Two weeks later, the market quickly corrected the gap between the share prices of the two companies. Dupont's share price climbed to $365.89, while GM's share price fell to about $370. Graham made a quick profit, and the return on a single investment was as high as 23%, which did not include the difference between the stock he sold and the stock he bought in General Motors. This makes Granci Fund's large and small shareholders earn a lot of money.
Since the establishment of Granci Fund for one and a half years, the return on investment has been as high as 100%, which is much higher than the 79% increase of the average share price in the same period. However, due to the differences between shareholders and Graham on the dividend plan, Granci Fund had to be dissolved in the end. But this made Graham unexpectedly meet his best gold partner, Jerome Newman. Newman has extraordinary management skills, and he can easily handle all kinds of complicated affairs, which enables Graham to free up more energy to concentrate on securities analysis and formulate investment strategies.
1Graham was on the verge of bankruptcy in the Wall Street stock market crash that began on September 5, 929.
At the end of 1934, the security analysis is published.
1936 interpretation of published financial statements.
Smart investors published in 1949.