Meet Warren Buffett’s mentor – Benjamin Graham

Warren Buffett, in a tribute to Benjamin Graham, writes, “More than any other man except my father, he influenced my life.”

Warren Buffett , Sempra Energy,  Berkshire Hathaway Inc, M&A market, Oncor, Oncor Electric Delivery Co
Warren Buffett. (Reuters)

The investing world is in awe of the Oracle of Omaha, Warren Buffett. But, there’s one man who’s played a pivotal role in making him what he’s today. Benjamin Graham, “the father of value investing”, has left an indelible mark on Warren Buffet’s life. In the preface to ‘The Intelligent Investor’ penned by Benjamin Graham, Warren Buffett writes, “To me, Ben Graham was far more than an author or a teacher. More than any other man except my father, he influenced my life.”

Benjamin Graham had not merely been Warren Buffett’s teacher in Columbia University, but also his partner and employer. In a tribute to Benjamin Graham after his demise, Warren Buffett wrote an obituary note which speaks volumes of the high regard Warren Buffett places on him. Bringing out the different dimensions of Benjamin Graham’s persona, Warren Buffett says, “I knew Ben as my teacher, my employer, and my friend. In each relationship — just as with all his students, employees, and friends — there was an absolutely open-ended, no-scores-kept generosity of ideas, time, and spirit.”

In Warren Buffett’s own words, Benjamin Graham hoped that he could fill each day with “something foolish, something creative and something generous”. Explaining how Benjamin Graham achieved the three whimsical goals, Warren Buffett says that his mentor had a knack for packaging ideas in a form that avoided any overtones of sermonizing or self-importance. In fact, Benjamin Graham wrote in an easy-to-read style. Capturing this, Warren Buffett observes: “Although his ideas were powerful, their delivery was unfailingly gentle.”

The ideas propounded by Benjamin Graham ooze creativity. Take for instance his favourite allegory of Mr. Market, an obliging fellow who turns up every day at the shareholder’s door offering to buy or sell his shares at a different price. Often, the price quoted by Mr. Market seems plausible, but sometimes it is ridiculous. The investor is free to either agree with his quoted price and trade with him, or ignore him completely. Mr. Market doesn’t mind this, and will be back the following day to quote another price.

It is this creativity that Warren Buffett was referring to when he wrote, “Readers of this magazine (Financial Analysts Journal) need no elaboration of his achievements as measured by the standard of creativity.” Warren Buffett considers him to be the best in the field of investing as he writes, “It is difficult to think of possible candidates for even the runner-up position in the field of security analysis.”

Warren Buffett was in total awe of this man. In his imitable style, Warren Buffett writes, “A remarkable aspect of Ben’s dominance of his professional field was that he achieved it without that narrowness of mental activity that concentrates all effort on a single end. Certainly I have never met anyone with a mind of similar scope.”

At the end of it all, Benjamin Graham achieved the third goal too — of doing something generous. In fact, Warren Buffett rates him the best in generosity, as he notes, “His third imperative — generosity — was where he succeeded beyond all others.” In the tribute to the man, Warren Buffett says, “Walter Lippmann spoke of men who plant trees that other men will sit under. Ben Graham was such a man.”

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First published on: 27-08-2017 at 03:08 IST