The handwritten letter was from "La Champouse." 42 Avenue de Marseille, Aix-en-Provence. Benjamin Graham was living in the South of France, retired, with his lady friend, and translating Greek and Latin classics. That was a favorite avocation. The prescript of Security Analysis, the forbidding black bible of security analysts, is from Horace: many shall be restored that are now fallen and many shall fall that are now in honor.
I hadn't known him, but I had written some sentences about him in The Money Game. Graham, I had written, "was the dean of our profession, if security analysis can be said to be a profession. The reason that Graham is the undisputed dean is that before him there was no profession and after him they began to call it that."
Graham liked being called the Dean. He corrected a sentence in my book in Greek that no one had checked, and one or two other references. He said he had something in mind to discuss, when he came to New York.
Shortly after, he did appear in New York, to see a publisher about his translation of Aeschylus and to see his grandchildren. I asked him what he thought of the market. Hoc etiam transbit, he said, "this too shall pass."
Graham said he wanted me to work on the next edition of The Intelligent Investor, the popular version of his textbook. "There are only two people I would ask to do this," he said. "You are one, and Warren Buffett is the other."
"Who's Warren Buffett?" I asked. A natural question. This was 1970, and Warren Buffett wasn't known outside of Omaha, Nebraska, or Ben Graham's circle of friends.
Today, Warren is so well known that when newspapers mention him they sometimes need no phrase in apposition to identify him, or if they do, they say simply, "the investor." There are full-length biographies of Buffett on the shelves. He is indeed "the investor," one of the best in history. Investing has made him the second richest person in the country, behind his bridge buddy Bill Gates.
Even in 1970, Warren had an outstanding investment record with an unfashionable technique. He started an investment partnership in 1956 with $105, 000 from friends and relatives. When he terminated that partnership in 1969, it had $105 million and had compounded at 31 percent. Warren's performance fee meant he was worth about $25 million. He ended the partnership because he said he couldn't understand the stock market anymore.
I was not the right author to work on the next edition of The Intelligent Investor. I was an acolyte of Sam Stedman (not the mutual fund nor the bridge conventions) by way of Phil Fisher. Stedman's investment philosophy,