Benjamin Graham is widely known as “the father of value investing” writing Security Analysis (1934) with David Dodd and The Intelligent Investor (1949) which stressed his investment philosophy of minimal debt, buy-and-hold investing, fundamental analysis, buying within the margin of safety, investor psychology and contrarian mindsets. He is also known for teaching his famous students Sir John Templeton and Warren Buffett who has described Graham as the second most influential person in his life after his own father.
In the current volatile market, I feel it is a good time to reiterate some of Graham’s investment lessons which I have also discussed in my book namely:
• Don’t invest using borrowed money.
• Never pay too much for the prospect of future profits.
• Never count on greater fools to bail you out of reckless risks.
• Your results depend less on how markets behave than on how you behave.
With fear filling the air, the following paragraph from Graham gives us sound advice in such times:
As Graham explains, just because others are trading (or institutional mathematical algorithms are accelerating sales), doesn’t necessitate that you do so. In other words, when others are panic selling – it is their problem and doesn’t have to be yours. Though we can marvel at some investor behavior, we certainly don’t have to join in.
I have no idea what the next week, month or even year will bring, but believe we will be rewarded for remaining patient, long-term investors. At the core of Altrius’ Promises, Core Values and Investment Process, we remain long term investors viewing each company in which we invest not as a stock certificate to be traded in the short term, but as a long term investment in a business selling at a reasonable valuation and which pays us a dividend to patiently weather such storms.
I believe we will continue to be rewarded by our disciplined income-focused, value-driven process with our current portfolio of 71 U.S. and international stocks selling at an attractive ten (10) times earnings while paying more than 4% in dividend yield.
In the meantime, should you have any questions about our process or your personal financial circumstances, please don’t hesitate to contact us.