Would Benjamin Graham Have Survived the Financial Crisis of 2007 - 2009

Abstract

This paper focuses on studying the theories proposed by Benjamin Graham in The Intelligent Investor. He sought to provide investors with criteria for selecting stocks that provided value while minimizing risk. This paper analyzes each of his criteria, updates each when necessary, and determines the significance of each for providing excess returns. The period studied is from 2003 to 2015. This provides information regarding Graham's theories after the update by Jason Zweig in 2003 and captures the effects before, during, and after the financial crisis that began in 2007. The results of this paper indicate that only certain criteria proposed by Graham are significant and only are beneficial to investors in years of uncertainty and years when the overall market declines.