2022. Paul Johnson and Paul D. Sonkin. Columbia Business School Publishing.
Who amongst us doesn’t know the contributions of Benjamin Graham and David Dodd to securities evaluation and their disciplined approach to long-term investing? After reading it and thoroughly having fun with it, I now understand that Roger Murray represents a dynamic successor to them within the practice of fundamental evaluation with an emphasis on determining the intrinsic value of every stock. This fresh have a look at a fantastic investment figure of the last millennium restores confidence in fundamental evaluation – and in value investing particularly. It also highlights how sticking to at least one’s beliefs in all points of labor and life can leave a long-lasting impression that extends beyond one’s own life.
The authors present this book sympathetically, familiarizing the reader with Roger Murray’s skilled and private life after which introducing him to his own through 4 lectures and a 1996 interview by Peter Tanous, which took place a 12 months before his death Introduce voice on the age of 86. Both authors have backgrounds that enrich their work on this investment master. Paul Johnson has taught security evaluation and value investing at Columbia Business School for greater than 30 years Paul D. Sonkin was a portfolio manager at Mario Gabellis GAMCO Investors, Inc. and likewise served as an adjunct professor at Columbia Business School.
Murray strikes me as a rational thinker who can approach any problem with an open mind. The biographical portion of the book highlights this strength during his time at Yale, where he received awards for literary research and evaluation at an early age. What drew Murray to business through the Great Depression was marriage. Although he desired to turn out to be a teacher, he realized that he needed a greater income to support his family.
Early in his profession at Bankers Trust, Murray discovered his passion for investing and his calling to work in investment management. At the age of 39, he was put in command of the economic and business research department while also being given responsibility for managing institutional portfolios. Murray’s most important concern about investing after World War II was that the returns on fixed income securities would fall in need of the returns he expected for stocks. At the time, fixed income securities were the first source of investment returns for each retail and institutional investors.
Murray went right into a type of retirement when he left Bankers Trust in 1954 to go to Columbia Business School. His dream of becoming a teacher would come true, even when his work at Columbia was initially administrative. As an adjunct professor, he was only capable of teach one class – Advanced Security Analysis, originally taught by Ben Graham, who was retiring in 1956. With Murray’s extensive experience in investment management, he brought a way of pleasure to all of the courses he taught at Columbia over twenty years. After his departure, the varsity’s excellent value investing program was not actively promoted until it was revived within the Nineteen Nineties with the founding of the Heilbrunn Center for Graham & Dodd Investing.
After 10 years at Columbia Business School, Murray took a sabbatical and started working at TIAA (later with CREF) as a vp and economist, leading the investment division. At the time, he noted that income from university endowments was lagging behind the expansion rate of operating budgets. As a treatment, Murray invested conservatively in stocks with a time horizon of several a long time based on his optimistic outlook for the U.S. economy.
Over his 30 years of investing and teaching, Murray inspired widespread interest in investing for retirement, not only in pension plans but additionally in Keogh and IRA plans. He supported U.S. Representative Eugene Keogh in his efforts to pass a retirement plan for self-employed people, and he pushed for the IRA to be included in ERISA in 1974. Be 1968 comprehensive study Studying the impact of retirement plans on savings and investments for the National Bureau of Economic Research (NBER) was a key a part of the IRA effort.
Murray’s ideas are perfectly summarized within the 4 lectures he gave on the Museum of Television and Radio in New York City in early 1993, sponsored by the Gabelli Asset Management Company. In these lectures the reader “hears” his voice, understands his argument and gets a number of hearty laughs. Murray addresses quite a few topics that highlight critical issues facing investors, including earnings power and its sources, intrinsic value, money flow versus reported earnings, and valuation inflation. The authors’ comments are also available to readers through the lectures; Your evaluation makes the lectures appear as in the event that they got recently and never 30 years ago.
In addition to the in-depth insight into basic investing, readers get a special treat in the beginning of the book: they’re introduced to Murray’s family. The Murrays were a hard-working, close-knit family that valued education and a powerful commitment to productive work. The big surprise for me was once I discovered about his older sister Grace Hopper, affectionately referred to as “Grandma COBOL.” She wrote the industry’s first software compiler in 1952.
My only criticism of this excellent book is that it lacks an index. I used to be placed on the spot when a colleague asked me a selected query about Bruce Greenwald. I also tried unsuccessfully to quickly look up Murray’s quote: “I have a deal you can’t refuse!”
This outstanding tribute to Roger Murray and his enduring value will delight seasoned investment professionals and people just starting their careers in investment research and management. For the more experienced practitioner, it becomes clear how vital it’s to rigorously consider pricing versus the intrinsic value of securities when managing assets. For the scholar or younger practitioner, it extols the enjoyment and satisfaction of loving one’s work and occupation over a protracted and wealthy profession. Overall, it sheds great light on the evolution of the investment management industry during the last 90 years – and the way one clever individual has contributed a lot to it.
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