Applying Benjamin Graham’s Theory of Investing to the Private Markets
Aaron Kellner
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Aaron Kellner,

Applying Benjamin Graham’s theory of investing is one thing; explaining it, which is essential, is something else entirely.

There is a reason why, for example, Warren Buffett is the greatest proponent of this style of investing — and that reason goes beyond the incredible performance of Berkshire Hathaway, with its indisputable returns and positive reportage — as well as international fandom — about the same.

Buffett is the Great Explainer of Wall Street: His avuncular, Midwestern demeanor masks a ruthless — and acute — ability to dissect numbers, and perform a fiscal vivisection of a company; weighing and evaluating the relative health of this or that department versus the toxicity of some subsidiary business, followed by restoring the body corporate without a single blemish, scar or sign of stitches.

He knows what he wants, at a price he considers just, so he can derive consistent returns from any purchase he makes.

His talent rests in expressing his position to shareholders, which he does through his annual report and yearly meeting — his financial Woodstock, so to speak — in Omaha, Nebraska, where he surveys the global economy, summarizes his view of the stock market and signals his intentions for the future.

That he accomplishes this agenda proves many things, chief among them, that Buffett is not content to let his success be the final arbiter of his credibility or insight.

He knows what I do; which is to say, though Buffett is not aware of my firm in particular, he would appreciate the wisdom I possess — the skills my coworkers and industry colleagues apply on a daily basis.

He knows that investor relations and media relations are critical to demystifying the esoterica of economics or exchange-traded funds, or initial public offerings or closed-end funds.

He attracts new investors by articulating the how and why of his investment strategy, choosing his words carefully, constructing his sentences deliberately and conveying his tactics methodically.

That is my professional duty, too, which I fulfill with a passion for facts and a commitment to clarity.

Buffett gives shareholders a surplus of data.

I serve a buffet of worthwhile information.

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