Benjamin Graham

Benjamin Graham lived through the 1929 crash and the Great Depression as an active investor, watching rational-seeming businesses get priced by the market as if they were worthless, and previously "safe" ideas evaporate almost overnight.

The pain: Graham saw firsthand how violently a market's mood can swing from euphoria to despair, often with little connection to a business's actual underlying health — and how that mood swing wiped out investors who treated the market's price as if it were always correct.

The lesson: Graham created the "Mr. Market" allegory: imagine the market as a business partner who shows up every single day offering to buy or sell you his share of the business, at a price driven entirely by his mood that day — sometimes wildly optimistic, sometimes deeply depressed. Mr. Market is there to serve you, not to guide you. You are never obligated to trade with him just because he showed up.

From this came his second core idea — the margin of safety: only buy a business for meaningfully less than your honest estimate of its real value, so that even if your analysis is somewhat wrong, or bad luck strikes, you still have a cushion protecting your capital. Graham's ideas, laid out in "The Intelligent Investor," directly shaped his most famous student — Warren Buffett — and remain the intellectual foundation of value investing today.