Not too long ago someone asked me what kind of an investor I was. I was tempted to make a joke of the question and answer simply, “A good one.” But then I thought of one of my old professors at Columbia Business School, Benjamin Graham, and I realized the depth of the question.

Graham lived from 1894 to 1976, wrote extensively, and was widely accepted as one of the most influential investment minds of all-time. He was credited with educating many investment luminaries including Warren Buffet, former Goldman Sachs partner Leon Cooperman, Mario Gabelli of the Gabelli Asset Management and, of course, me!

In Graham’s books Security Analysis and The Intelligent Investor, the author made a clear distinction between an investor and a speculator. He was dismissive of the speculator as a gambler looking for the quick buck, inside information, or the hottest new “concept stock.” He was contemptuous of the lazy person underlying the speculator, confidently and accurately predicted inferior long term results to those who relied on scant unconfirmed information and rumor.

On the other hand, the value investor builds a portfolio of investments through hard investigative work, studying “the critical variables for success” of each prospective investment candidate. Only after thorough research and determining a “margin of safety” in each investment is a purchase order issued.  Sound easy? Well it’s not.

Armed with two Advil, value investors study company financial statements; pouring over numbers in accounting statements and filings with government agencies trying to find needles in the haystacks of finance.  When you do happen on a deeply undervalued stock, the sense of accomplishment is hard to describe, but well worth your efforts!

For more on Ben Graham, my investment hero; read his book, The Intelligent Investor. It could make you, or more importantly, your child or your grandchild rich. Our firm has successfully practiced Graham’s principals since being founded in 1995.

—as published in Homeland Magazine