Out of curiosity, I went digging for more info on the strategy Ben Graham used in his early fund back in the 1920s.
As was pointed out in the last post, he was buying undervalued stocks (the long-only portion) found through his own fundamental analysis, along with a separate hedging strategy, and some margin debt thrown in for good measure.
There’s was nothing really funky going on beyond that. Graham was very much focused on risk — minimizing losses — but, unlike his post ’29 strategies, he clearly was trying to maximize gains too.
In an article written in 1920, Graham outlined his hedging strategy. Continue Reading…