The answer is that Graham was ever the seeker after truth. How else could you describe someone who chose as the theme for a short speech on his 80th birthday party Tennyson's great poem, Ulysses (you know the one - "to strive, to seek, to find and not to yield")? And as part of his striving and seeking, Graham found that investment analysis was probably not worth the candle. Or, at least, in 1976 - the year of his death - he wrote: "I am no longer an advocate of elaborate techniques of security analysis in order to find superior value opportunities. In the light of the enormous amount of research now being carried on, I doubt whether in most cases such extensive efforts will generate sufficiently superior selections to justify their cost. To that very limited extent, I'm on the side of the 'efficient market' school of thought."
However, about 20 years before this, somewhere in the late 1950s, Graham was espousing much the same view. You can see it on film at http://www8.gsb.columbia.edu/valueinvesting/about/history. There, as part of a 15-minute webcast on value investing, there are clips of Graham addressing a class of would-be investment professionals at New York's Columbia University, where he taught in his spare time. Prompted by a scripted question about whether Wall Street analysts were more accurate in their short-term or long-term forecasts, Graham laughs and says: "You have a choice between tossing a coin and taking the consensus of expert opinion and the result is just about the same in each case. My explanation for that is this: that everybody in Wall Street is so smart that their brilliance offsets each other and that whatever they know is already reflected in the level of stock prices and consequently what happens in the future represents what they don't know."
True, the 'dean of Wall Street' is enjoying himself and talking tongue-in-cheek. Even so, given the direction that his thinking was to take, this was a revealing moment. It's also a bit odd that Graham's ruminations on market efficiency should form a key part of a marketing tool for a value investing research centre. Which brings me to the main point of this week's Bearbull - effectively to advertise two websites which do just that; they provide a resource for students of value investing. First, there is the Heilbrunn Centre for Graham and Dodd Investing, which is part of the Columbia Business School in uptown Manhattan. Second, there is the Ben Graham Centre for Value Investing, part of Ivey Business School at Western University, Ontario.
Of the two, the Heilbrunn Centre is the longer established - it opened in 2001 - and, appropriately, is based at Columbia, the intellectual home of value investing. For over 30 years, Graham was a part-time teacher there. He took a finance class whose best-known student - in the early 1950s - was Warren Buffett. In addition, a colleague at Columbia was David Dodd, with whom Graham wrote Security Analysis, the text that laid the foundations for rational investment analysis.
Today, Columbia still pushes out the boundaries of value investing. The director of the Heilbrunn Centre is Bruce Greenwald, whose best-known book 'Value Investing, from Graham to Buffett and Beyond' updates value investing for an age where tangible assets count for less and intangibles for more. In particular, it addresses the issue of valuing brands, business franchises and research and development spending and, according to Mario Gabelli, a top US fund manager and a graduate of Columbia's finance course in 1967, is a "must read".
On the site itself there are papers, lectures and film clips; plenty of contributions from the great Buffett plus a course of lectures from professionals rather grandly called Value Investing with Legends. Still, getting 10 hours-worth of lectures from billionaire professionals such as Michael Price and Bill Nygren for nothing is not to be scoffed at.
The website for the Ben Graham School of Value Investing runs along similar lines. True, it may lack the connections that you would expect of Columbia Business School. Even so, its collection of web casts is fascinating largely because it includes contributions from Walter Schloss and Irving Kahn. Schloss, a contemporary of Mr Buffett at Columbia, died in 2012; but Mr Kahn, now 108, still claims to be actively involved in running his investment firm, Kahn Brothers, almost 85 years after he made his first trade, short selling shares in a copper miner shortly before the Wall Street Crash.
Anyway, check out these websites and, perhaps, treat them as I do - places to visit when you need a bit of education, a bit of re-assurance or a bit of inspiration.
