Benjamin Graham

Benjamin Graham married thrice; but little is known about his spouses or his children. His first wife, whose name remains unknown, was initially a dance teacher. Although she later gave up her career to look after her family she had to resume teaching after the 1929 stock market crash.

Graham divorced her first wife in 1937, marrying a young actress in the following year. But this marriage was also short lived. He shortly divorced her to marry his secretary, Estelle Messing Graham. Estelle, also called Estie, had been described as “a warm, giving and non-judgmental person”.

With Estelle, he had one son, Benjamin Graham Jr. From his previous two marriages, he had at least two more sons; Newton, who died of meningitis of the spine at the age of eight and Newton II, who served in the U.S. Army.

Benjamin Graham was born as Benjamin Grossbaum on May 9, 1894, in London, England into a Jewish family. His parents, Isaac M. and Dorothy Grossbaum, migrated to the USA when he was one year old, eventually settling down in New York, where Isaac started an export import business.

In 1903, Isaac Grossbaum passed away, leaving his wife to take care of nine year old Benjamin and his two younger siblings, Leon and Victor. While she could still manage, the Bank Panic of 1907 robbed her of her savings, forcing the family to move in with Dorothy’s brother, Maurice Gerad.

A brilliant student at school, Benjamin entered Columbia University on a scholarship, graduating in 1914 as salutatorian of his class. At that time, he was just 20 years old and ready to make his fortune, taking a bold and unorthodox step.

Few weeks before his graduation, the University offered him teaching positions in three different faculties: Greek and Latin philosophy, English, and mathematics. Although the job would have given him financial security he declined the offer and joined the Wall Street.

In 1914, Benjamin Grossbaum began his career as a messenger at the Newburger, Henderson and Loeb, a brokerage firm at the Wall Street. In those days, it was deemed a revolutionary step because at that time university graduates did not consider stock broking as a career option.

Initially, his main job was to write scores on the blackboard; but with the passage of time, as he won the confidence of the proprietors with his natural intelligence he was given other responsibilities. Very soon, he was doing financial researches for the firm.

Rising through the ranks exceptionally quickly, he became a partner of Newburger, Henderson and Loeb in 1920. He was soon earning $50,000 per year. Sometime now, he changed his surname to suit the Wall Street ambience, becoming Benjamin Graham instead of Grossbaum.

In 1926, Benjamin Graham formed Graham Newman Co with Jerome Newman, another Wall Street broker. It was indeed a revolutionary partnership as they adopted some radical strategies, which not only safeguarded their clients’ investments, but also enabled them to provide a 670% return over a period of ten years. .

While putting a bet that a particular stock price was going to rise, they would place simultaneous bet that the price of another stock was going to fall. This way, they could fully use the available resources, without having to keep cash cushions, outperforming leading mutual funds by 40%.