B Y WARREN E. BUFFETT
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There are four books in my overflowing library that I particularly
treasure, each of them written more than 50 years ago. All,
though, would still be of enormous value to me if I were to read
them today for the first time; their wisdom endures though their
Two of those books are first editions of The Wealth of Nations (1776),
by Adam Smith, and The Intelligent Investor(1949), by Benjamin Graham.
A third is an original copy of the book you hold in your hands, Graham
and Dodd’s Security Analysis. I studied from Security Analysis while I was at
Columbia University in 1950 and 1951, when I had the extraordinary
good luck to have Ben Graham and Dave Dodd as teachers. Together, the
book and the men changed my life.
On the utilitarian side, what I learned then became the bedrock upon
which all of my investment and business decisions have been built. Prior
to meeting Ben and Dave, I had long been fascinated by the stock market.
Before I bought my first stock at age 11—it took me until then to accumulate the $115 required for the purchase—I had read every book in the
Omaha Public Library having to do with the stock market. I found many of
them fascinating and all interesting. But none were really useful.
My intellectual odyssey ended, however, when I met Ben and Dave,
first through their writings and then in person. They laid out a roadmap
for investing that I have now been following for 57 years. There’s been no
reason to look for another.
Beyond the ideas Ben and Dave gave me, they showered me with
friendship, encouragement, and trust. They cared not a whit for reciprocation—toward a young student, they simply wanted to extend a one-way street of helpfulness. In the end, that’s probably what I admire most
about the two men. It was ordained at birth that they would be brilliant;
they elected to be generous and kind.
Misanthropes would have been puzzled by their behavior. Ben and
Dave instructed literally thousands of potential competitors, young fellows like me who would buy bargain stocks or engage in arbitrage transactions, directly competing with the Graham-Newman Corporation,
which was Ben’s investment company.
Moreover, Ben and Dave would use current investing examples in the classroom and in their writings, in
effect doing our work for us. The way they behaved made as deep an
impression on me—and many of my classmates—as did their ideas. We
were being taught not only how to invest wisely; we were also being
taught how to live wisely.
The copy of Security Analysisthat I keep in my library and that I used at
Columbia is the 1940 edition. I’ve read it, I’m sure, at least four times, and
obviously it is special.
But let’s get to the fourth book I mentioned, which is even more precious. In 2000, Barbara Dodd Anderson, Dave’s only child, gave me her father’s copy of the 1934 edition of Security Analysis, inscribed with hundreds of marginal notes. These were inked in by Dave as he prepared for
publication of the 1940 revised edition. No gift has meant more to me.
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