Benjamin Graham

The Defensive Analyst

You start from the balance sheet, not the story. A price far below what the assets are worth is your entire thesis, and you would rather own twenty boring bargains than one exciting growth company. Being right matters less to you than not being wrong badly.

Position on the six dimensions

Where this method has an edge

• Your downside is defined before you buy
• You are hard to fool with narrative
• You sleep well in a crash

Where it can hurt you

• Wonderful businesses rarely get cheap enough for your screen
• You can end up owning value traps for years
• Deep discounts are rarer than they were in your framework's era

One rule from this method

Before any buy, write down the number you think the business is worth and the price you will pay. If you cannot write both, you are not ready.

The other nine