Seminar in Value Investing

Columbia Business School is the academic home of Benjamin Graham and the birthplace of security analysis and value investing. Graham taught Advanced Security Analysis at Columbia from 1927 to 1956. Graham and David Dodd published their seminal work, Security Analysis, in 1934 and Graham published The Intelligent Investor in 1949. Roger Murray took over teaching the course upon Graham’s retirement and taught it until he retired in 1977. After a 16-year gap, value investing returned in the fall of 1993 under Professor Bruce Greenwald’s guidance and has been offered at the school ever since. Interestingly, the course was renamed Introduction to Value Investing, which was the first time the course referenced value investing in its name. Notable graduates from the program include Warren Buffett, Mario Gabelli, Leon Cooperman, Chuck Royce, Art Sandberg, Glenn Greenberg, William von Mueffling, and Todd Combs. This course introduces a framework for investing based on fundamental analysis and evaluates investment opportunities through the lens of an equity investor. Although much of the material in this course has a strong academic foundation, the goal is to develop practical tools that the student can use immediately to improve their investment process and decision making in the real world. The course will demonstrate how to determine a company’s fundamental value. Key inputs in the analysis will be the company’s level of profitability and financial returns, the duration of its competitive advantage, the value of its growth opportunity, the strength of its management team, and the risks inherent in the investment. These tools apply to public and private markets, and the course will show how to use the tools in each opportunity. The course material will be delivered through lectures, exercises, readings, in-class discussions, and homework assignments; the last day of the course will be devoted to student presentations of an investment recommendation using the tools from the course. This survey course is designed to introduce the fundamentals of the Graham and Dodd value approach to investment analysis. The basic analytical structure and its relationship to many elements from the MBA curriculum will be described through lectures, exercises, readings, in-class discussions, and homework assignments; the last day of the week will be devoted to student presentations of an investment recommendation.