on August 13, 2012
Joe Carlen provides a detailed and insightful introduction to Graham and his work. His book is straightforward enough to be understandable to readers unfamiliar with value investing and also detailed enough to appeal to those seeking a deeper understanding of Graham's history and philosophy.
As was mentioned in a previous review, one of the most beneficial features of the book is its structure, which jumps back and forth between the biographical narrative of Graham's life and a survey of the value investing principles Graham formulated. All the while, Carlen links the development of each aspect of value investing theory with parts of Graham's life that informed it.
However, in my opinion, the best parts of the book deal with Graham's actual life. After all, Graham's life story provides amazing material to work with! He led a fascinating existence and could be termed a bona fide renaisance man. He enjoyed and excelled in arts, theater, literature, travelling, language -- so much beyond the boundaries of finance.
This, however, is not to diminish the parts about value investing. They are also very well done. But, of course, Graham himself also wrote a number of books on his theories, including Security Anlysis and The Intelligent Investor. So, for me, reading about his life was the most interesting part of all.
Importantly, Carlen interweaves the theory and the life story -- which has never, to my knowledge, been done in a book about Graham. And he does it in a way that everyone (including those without an overwhelming background or even interest in fianance) will enjoy immensely. Most importantly, I think that all will delight in reading about Graham's theories by virtue of their status in the investment community. Value investing is regarded by many investors as the holy grail of investment theories. Its principles have stood the test of time, outperforming over long, long periods just about every other stock market strategy. This alone is good reason to pick up this book (and others on value investing).
All in all, the Einstein of Money was enjoyable and informative (and NOT "plumped up" or repetitive, as another reviewer incorrectly suggested). Carlen tackles the material with the right structure and appropriate level of complexity. Almost no readers will find the material inaccessible and, in fact, I would argue that they will get a real kick out of it. It's a worthy addition to the pantheon of books on Graham and value investing.
on January 5, 2013
I've been a Benjamin Graham fan for years, and his investing books have had a huge influence on my thinking on the subject--particularly the two famous ones, Intelligent Investor and Security Analysis. I am an ardent value investor and fan of many of Graham's protégés as well (both the famous and not-so-famous ones). But when I came across this biography I realized that I knew very little about the life of the man himself, or the other areas where he was active. So it was with great interest that I sat down to read this book, and I was not disappointed. I had felt that the subject might be a touch dry, even for a fan such as myself, but I was mistaken. This was a highly engaging biography, and entertained me even as it taught me about a character who I've admired for so long.
It has long been an assumption of mine that value investing was born mainly out of the depression, but the tales of Graham's early years were an interesting eye-opener. In reading the stories about his difficult youth--the riches to rags--you can see the foundation being laid for what was to come. There were some fascinating segments here about the downfall of the Graham family, and Graham's determination to raise the family up again and help his struggling mother. And this was 20 years before the start of the great depression.
When it comes to the period of Graham's education, and his academic accomplishments, the story becomes truly inspiring. Graham was a more brilliant man than I was aware, and reading about the breadth of his pursuits is amazing. It's clear that he could have made his name in ANY walk of life, had he never come to the investing world at all. Truly inspiring stuff.
Others have mentioned the format of this biography as a weakness (it is split chapter by chapter between Graham's bio, and discussion of his investing/academic ideas). I partially agree with the criticism, but mainly in the sense that I was deeply engaged by the biographical material and wanted to continue with it at the end of every chapter. However, for readers not deeply familiar with Graham's writings, the investment chapters will be useful. Warren Buffett has said, "No one ever became poor by reading Graham," and I suspect that no one will come to harm by reading these chapters, either. Further, even devotees of Graham, such as myself, probably aren't familiar with areas such as his ideas for currency reform, etc, so there are useful bits there for all of us.
All in all, a really strong biography of a great man, and a very easy and interesting read. Graham was the primary influence on some of the most astute investors in history, and this book is a great way to get to know a little about the man himself. I highly recommend this one to anyone who wants to learn a little more about one of the greatest minds of the 20th century.
on August 12, 2012
After the publication of my book a number of publishers contacted me about potential topics for another book. In response, I recommended a book that collected Ben Graham's articles but they told me someone was already doing that (i.e., "Benjamin Graham: Building a Profession," 2010). They then stated the following: "You know, no-one has written a biography of Ben Graham, and they really should. What do you think?" While I agreed the need was certainly there, I knew I was not the right person to undertake such a project (I am not a biographer) so I turned it down. I am certainly glad that I did for Joe Carlen has done a splendid job in his new biography of Mr. Graham.
One of the main challenges of a project like this was how to deal with the breadth of Mr. Graham's life and theories in one volume that is readily assessable to lay readers. Mr. Carlen accomplishes this by inter-weaving chapters on Mr. Graham's life with those on his theories. This is a novel way of addressing the subject, and one that puts Mr. Graham's theories into context, which is important because Mr. Graham was a product of his times, as we all are, and therefore understanding his times facilitates greater understanding of his theories. The result, as Howard Marks of Oaktree Capital Management stated, is "a lucid introduction to Graham and his ideas, and as such does investors a real service. Its message is an essential one."
The only nit I have is with the title, "The Einstein of Money." In a review, Roger Lowenstein likened Mr. Graham more to Descartes than Einstein, but I would go further and liken him to Isaac Newton, creator of classical physics and calculus. After all, Mr. Graham also founded a discipline (Security Analysis) as well as a method of analysis (value investing). Nevertheless, Mr. Graham was both a genius and a highly independent thinker, like Einstein was, so the title is accurate. More importantly though, this book helps to explain why Mr. Graham "is still a hero to" Mr. Buffett, as well as to countless other financial professionals--including me.
on November 20, 2012
This book was a great read. It offered many insights into the character and atmosphere of the times that Benjamin Graham operated in.
I knew he was a great investor and mentor for Warren Buffett now I know that he was also a great man. It's too bad that Wall Street doesn't practice the ethics and honesty of Ben Grahm today.
Ben Graham was the father of value investing, the idol of Warren Buffet, and a brilliant renaissance man with numerous and varied intellectual pursuits who also led a colorful private life which included three wives, an exotic lover and numerous affairs. As such his story is interesting and worth telling. In addition the author has juxtaposed Graham's biography with alternating chapters explaining his investment and economic philosophies, topics which have amazing topical applications even though they were formulated over 70 years ago. And yet this book fails.
First the good news- Graham is truly a fascinating man whose life encompassed the first 75 years of the 20th century, during which he formulated and implemented his theories of investment very successfully while also being a member of academia [his course at Columbia is where Buffet met him], authored some of the preeminent tomes on finance and investment for both the ordinary man and professionals, wrote plays, invented new kinds of slide rules and translated the Greek and Latin classics from their native languages. In a world where specialization rules and experts are concentrating on smaller and smaller spheres of their subject, encountering a man like Graham is eyeopening and energizing, giving a hint at the true potential within us all. And the chapters on his theories show an intellectual depth and understanding that the markets have only recently caught up to with behavioral economic theory.
And yet the book ultimately fails because the author is a poor writer. He uses phrases and descriptions over and over again [how many times do we have to be reminded that Buffet is Graham's greatest disciple? How about just about every time his name is mentioned!]. And the book, especially the chapters on investing, are plumped up like a chicken on steroids- unnaturally fattened by harmful or useless filler. Thus what could have been said in maybe 10 or 20 pages takes three chapters [over 60 pages] and eventually you find yourself cringing as the same thing is repeated as if you have a 15 second attention span and no short term memory.
The writer also has a tendency to over simplify and thus draw silly conclusions [for example , he compares Grahams contrarian investment style of buying when the market is going down and selling when it goes up to his abandonment of orthodox religious beliefs- a truly foolish analogy!]. There is only black and white in the world depicted- with Graham invariably bathed in the purest color. The net effect is one of enthusiasm triumphing over critical or substantive analysis- resulting in an amateurish work by in inadequate writer.
Upon completing this book I was glad I learned more about Graham who I have encountered superficially in biographies of Buffet and others, and I definitely agree with the value approach to investing, especially compared to the bipolar insanity which passes for market analysis and decision making today [and which really has been the norm for most of history as the Tulip bubble of the 1600's attests to]. But the book could and should have been written better- and it is all the author's fault. And because of that the intrinsic value of the book is less than it should be and there are probably better sources to invest your time in- something Graham would have understood.
on November 25, 2014
Enjoyable read. The Einstein of Money provides an overview of Graham's investment insights combined with the story of his life. Ben Graham's books on investment are still selling well. The Intelligent Investor was first published in 1949, and has sold over a million copies. It has been praised by Warren Buffet as "the best book on investing ever written." It still ranks in Amazon's top 200. Security Analysis is still the preferred book for many college investment courses, 80 years after its publication.
Graham was born in London in 1894, but raised in New York City. His father died when he was 9, and the family faced hard times. Graham sold newspapers on Manhattan street corners to help support his family. Graham was a brilliant student and won a scholarship to Columbia. He graduated second in his class almost two years early, despite working full-time throughout college. He was offered a faculty post on graduation from three different departments.
Graham invented security analysis, his aim was to establish what a company was really worth, its intrinsic value. The book explains Graham's methodology. Graham advocated a detailed analysis of a company's cash-flows, income statements and balance-sheets. Graham showed it was possible to find companies that were underpriced and developed the concept of "margin of safety." He advised that investors should always try to buy shares well below the company's intrinsic value. This provided a cushion to protect the investor from loss. He felt no compulsion to invest at all unless everything was in his favor. He called his approach "value investing." Essentially, Graham taught his students and readers how to identify and calculate value.Graham advised that "you are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right."
When I was at business school in the 1980s we were taught the efficient market hypothesis. This assumes that it is not possible to "beat the market" because stock market efficiency causes existing stock prices to always incorporate and reflect all relevant information. Graham was a professor at Columbia Business School before the theories of the "Chicago School" came to dominate academic finance. Eugene Fama who developed the efficient market hypothesis at the University of Chicago later won a Nobel Prize for this work.
For Graham, markets were not perfect and Warren Buffett has often debunked academia's love affair with efficient market theory. However, it meant that Graham's ideas never really received the respect they deserved from other academics. Graham's supporters have tended to be finance professionals who invest for a living. However, Graham had many disciples, many of whom are interviewed in the book. The most famous is Warren Buffett.
After reading "The Intelligent Investor" Buffett enrolled at Columbia's Business School in 1950 because he wanted to be taught by Graham. Upon graduating, Buffett joined Graham's investment firm, Graham-Newman Corp., which Buffett claimed started the first hedge fund. When Graham retired in 1956, Buffett - the obvious successor - decided to return to Omaha, reasoning that he only wanted to be in New York to work with Graham. Buffet gave his first son the middle name "Graham" in honor of his teacher.
Ben Graham made more than enough money to live comfortably and after he achieved financial security he was little concerned with money. Graham was a restless intellectual with lots of diverse interests. He loved literature - Proust, Virgil, Victor Hugo, the German poets. He read the Greek and Latin classics, philosophy, languages. He translated a book from the Portuguese, wrote several books himself, admired Marcus Aurelius, and identified himself with Ulysses, the ancient Greek hero. He wrote a Broadway play, which flopped. He invented a new slide rule and also devised a new system of international currency reform to replace the Gold Standard. Graham also had a complicated love live and was married four times. Ben Graham was a brilliant and complex man. Joe Carlen has written an affectionate biography.
on June 23, 2013
Ben GRaham was a wizard of the financial world. He would probally roll over in his grave in disgust with the state of the country at the present time . He would probally be saying the the markets are in a big bubble and all bubbles do burst
on March 31, 2013
Einstein of Money provides additional background detail about Benjamin Graham's life as well as a basic exposition of his investing insights. The historical and familial dynamics that formed his lifelong commitment to conservative, analytical investing are worth reading to flesh out one's perspective on this seminal figure in the history of investment. It also confirms the many anecdotes in other books that Graham was an expert on investing, but more interested in understanding great ideas than in the accumulation of great wealth.
on November 2, 2013
There are a few errors that are quite irritating and there is a lot of conjecture about Graham's life. For example Mark Russo is stated as a great investor at Gardner, Russo & Gardner instead of Tom Russo. Another example is the author states that the early 1900's were the first time that people started to accumulate wealth on wall street which is at best only half true as there was a whole generation of investors (mostly speculators though) who had become rich at least partially through wall street investments including Cornelius Vanderbilt.
I was hoping this book would be more like "The Snowball" or "There's Always Something To Do" which both effectively detail a great investor's investments throughout time and how they adapt and change to different environments. This book, unfortunately does not have that much in terms of that. People looking for a book more along these lines pertaining to Graham should pick up "Benjamin Graham the father of financial analysis," which is actually free online from the CFA website.
There are other annoyances including use of academic measures of risk, such as beta (which can be described harshly as technical analysis in numerical form), to analyze Graham's returns and of which is hugely antithetical to Ben Grahams teachings. You wouldn't describe temperature data in Celsius in a book about Daniel Fahrenheit.
I would rate this book lower, however it is cheaper than the 'cliff's notes' versions of Security Analysis and the Intelligent Investor combined.
on October 11, 2013
Great Book. This book should be on the shelf of every value investor! Enjoy it.The author not only tells the life of Ben Graham, but also teaches about his methods and how to become a good investor. As Warren Buffett said: " None ever gets poor by reading Graham".