1. Benjamin Graham, The Memoirs of the Dean of Wall Street. New York: McGraw-Hill, 1996. Anecdotal material from this source has been verified with Warren Buffett.
2. In 1915, members of the Grossbaum family, like many American Jews, began to anglicize their name to Graham in response to the anti-Semitism that flourished during and after World War I. Ben’s family made the change in April 1917. Source: November 15, 2007, speech by Jim Grant to the Center for Jewish History on “My Hero, Benjamin Grossbaum.”
3. Graham was born in 1894, the year of one of the biggest financial panics in American history, which was followed by the depression of 1896–97, the panic of 1901, the panic of 1903–04 (“Rich Man’s Panic”), the panic of 1907, the war depression of 1913–14, and the postwar depression of 1920–22.
4. Benjamin Graham, Memoirs.
5. Ibid.
6. Ibid.
7. Traditionally, people came to Wall Street in one of two ways. Either they entered the family business by following a relative into the job, or, having no such connection, they “came up through the hawsehole,” to use a nautical expression common on Wall Street at the time, starting young as a runner or board boy and working their way up, like Sidney Weinberg, Ben Graham, and Walter Schloss. Attending business school with the conscious intention of working on Wall Street was essentially unheard of until the early 1950s because most areas of finance, and especially the art of security analysis, had not developed as academic disciplines.
8. Details of Graham’s early career are from Janet Lowe’s Benjamin Graham on Value Investing: Lessons from the Dean of Wall Street. Chicago: Dearborn Financial Publishing, 1994.
9. Graham believed that one could be swayed by personality and salesmanship by going to meetings with a company’s management, so this was partly a way of remaining dispassionate. But Graham was also not particularly interested in human beings.
10. Interview with Rhoda and Bernie Sarnat.
11. Benjamin Graham, Memoirs.
12. Ibid.
13. Interview with Jack Alexander.
14. In Security Analysis, Principles, and Technique (New York: McGraw-Hill, 1934), Benjamin Graham and Dodd stressed that there is no single definition of “intrinsic value,” which depends on earnings, dividends, assets, capital structure, terms of the security, and “other” factors. Since estimates are always subjective, the main consideration, they wrote—always—is the margin of safety.
15. The apt analogy to Plato’s cave was originally made by Patrick Byrne.
16. Often this was because the kind of undervalued stocks he liked were illiquid and could not be purchased in large positions. But Buffett felt that Graham could have followed a bolder strategy.
17. Interview with Jack Alexander.
18. Interview with Bill Ruane.
19. Interviews with Jack Alexander, Bill Ruane.
20. Schloss, in his memoir, wrote with warm affection of his wife, Louise, who “battled depression throughout her entire adult life.” They remained married for fifty-three years, until she died in 2000.
21. Interview with Walter Schloss.