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Warren Buffett Story [Part 13] The Father of Value Investing

Updated: Oct 25, 2023

In the last article, we talked about how Warren Buffett decided to go to Columbia University because he read a book by someone named Graham. Benjamin Graham is the pioneer of a method known as "value investing," and he's the one who showed us the ropes of this approach.

At Buffett Online School, we believe in investing in great companies you understand, and utilizing Free Investing Resources to kickstart your investment journey is one of the best ways to learn.

The Influence of Benjamin Graham on Warren Buffett

Benjamin Graham, often called the father of value investing, believed many people make investment choices by following what other investors do without looking into the company's basics. In contrast, genuine investors dig deep into the company behind the stock. They study how much money the company makes, its financial health, and its prospects. This way, they can determine the company's true worth, regardless of what others in the market do.

Warren Buffett's Education and Early Career

Warren Buffett was a student of Graham at Columbia University, where he gave a lot of credit to Graham for introducing the idea of value investing to the world. Graham wrote a famous book called "Security Analysis," which is like a holy book for investors on Wall Street. Buffett saw Graham as his teacher and learned much from him before he started using his value investing approach and got impressive results.

Graham's way of investing is based on three important rules: First, be cautious and only invest when you're sure it's safe. Second, don't be surprised by market ups and downs; use them to your advantage. And finally, understand what kind of investor you are – are you patient or looking for quick profits?

These rules are like a guidebook for investors, and they help smart investors make decisions based on a company's basics. If you follow these rules and study a company's core details, you can make informed decisions and money in the long run.

Warren Buffett's Investment Prowess

Warren Buffett enrolled in Columbia University's business school, where he found that most of his classmates were already established as financial professionals on Wall Street. Despite being one of the youngest students in the cohort, he approached his studies with unwavering dedication. Buffett displayed a keen enthusiasm for participation, consistently engaging in class discussions and readily seeking clarification when needed.

Upon completing his academic journey, Buffett returned to his hometown and embarked on a three-year tenure as a stockbroker. It was during this time that he accumulated practical experience in the world of finance. Subsequently, he had the privilege of working alongside Benjamin Graham. Under Graham's mentorship, he acquired invaluable insights.

In 1956, with Graham's retirement, Buffett felt that he had gleaned sufficient knowledge and was inspired to return to his hometown, commencing his independent business ventures. In doing so, he actively applied the value investment principles instilled by Graham to great effect in the financial markets.

Warren Buffett's prowess as an investor is substantiated by his consistently superior annual operating income, which consistently outpaces general market trends. His remarkable track record is a testament to his exceptional abilities in the realm of finance.

Warren Buffett believes that spending a few hours learning from an expert is more valuable than figuring things out alone for ten years. He recognizes his success as an investor thanks to his mentor, Graham, and the mix of what he learned from Graham and his own experiences in the market.

He makes it clear that he relies on the established rules of the market and the right investment principles that Graham taught him. This has been a big part of his success in the investment world.

Read the next installment of Warren Buffet's Story here.

Join Our Free 2-Day BOS Value Investing MBA

At the Buffett Online School, we believe in learning the right investing mindset and system to start cultivating emotional detachment and grow our wealth safely and substantially in the long run.

Our next 2-day BOS MBA Value Investing Online Bootcamp is happening soon! We will teach you how to use Warren Buffett's proven investing method to maximize your portfolio.

buffett online school MBA free online investing class for beginners

Remember, you can cultivate the right investing mindset and unlock your potential to build wealth through intelligent investing. Together, we can create a network of educated investors who make informed decisions and contribute to their financial well-being!

In the meantime, feel free to check out some of our blog posts to continue learning. You can also join our BOS Telegram channel for more investing insights!

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