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the First analyst of America
Benjamin Grem has become famous as the founder of the concept of the fundamental analysis of the companies and their securities. He has died already 27 years ago, but its book the Analyst of securities till now keeps on the top lines of ratings of sales. And one of its pupils was Warren Baffet who does not deny that almost by all ideas is obliged to Benjamin Gremu.

the Ticket for Uoll - strit
Benjamin Grem was born in 1894 in England. A year later his family has got over to America where Benjamin`s father has managed to head prospering business. At Gremov there was a big house, they presumed to themselves the cook and the parlourmaid. But so proceeded not for long. The father has died, when to Benjamin was only nine. Business has passed under a management of its uncle and soon became unprofitable. Benjamin had to start to earn additionally to help a family.
And to continue to study, the young man needed to show now successes, worthy grants. And it was possible to it. Grem has received the grant on training in college Columbia which has ended in 1914. In the characteristic it has been told that it the vigorous student succeeding simultaneously in the mathematician, philosophy, English, Greek, Latin and music. It is no wonder that soon Grem has received the offer to continue career at once from three faculties. Not in the last instance from - for necessities to help a family Benjamin has chosen faculty Frederika Keppela, the mister who was held in respect on Uoll - strit and regularly receiving from broker offices of the request to recommend them the sensible young man as the assistant.
so it has got the first work on Uoll - strit. Grem has begun career by the assistant in department on trade in bonds in firm Newburger, Henderson and Loeb when to it was only 20 years. To Benjamin have appointed the salary of $12 in a week that was on $2 more than the average salary of young men of that time. At the beginning he was engaged redurable papers in office.
advancement on a career ladder could be tightened for a long time, but the First World War has helped. To Benjamin began to charge which - that from this, than the mobilised employees were engaged: it exposed quotations, helped in bek - office and etc. Gradually it managed to learn different aspects of work of broker firm. With the advent of new duties the salary has raised also - now Grem brought home already $28 a week.
soon management Newburger has tried to make of it the expert in attraction of clients. However from - for natural modesty and inability to convince Grem it has appeared the useless seller. Nevertheless dialogue with clients has appeared for the young man useful in the sense that has helped to notice: He almost knows nothing about bonds which tries to sell, does not possess even the elementary skills of the analysis of their profitableness and risk. So Grem was engaged in securities market studying.
quickly enough having reached some successes, Benjamin has received the invitation to a post of an analyst in company Bache and Co. However Newburger, Henderson and Loeb it have not released - specially for Benjamin they have created analytical department. It was one of the first analytical departments at the American brokers.

analysts the chief and percent the commander
On the new post of Grem was engaged in search of the underestimated companies. The first lucky find has soon followed. Company Guggenheim Exploration has decided to extend a part of the actives among shareholders on a parity basis. She owned shares in four other companies. Considering cost of each of realised actions, percent with which they occupied in actions most Guggenheim, and cost of the basic business on one action, Grem has calculated that the fair price of the action - $76,23. And they were on sale during that moment on $68,88. Having bought according to the advice of the analyst of papers Guggenheim Exploration, soon Newburger really could sell them almost on predicted by Gremom of $76.
not less successful there was a transaction with actions of firm Du Pont owning a large package of General Motors. On one action Du Pont it was necessary seven actions GM. However in the market of action Du Pont cost less, than seven actions GM, and after all at Du Pont was available also fast-growing chemical business. Company Grema needed to buy only share holding Du Pont and simultaneously to carry out short sale vsemero bolshego package GM. Quotations Du Pont have flied up.
by 1919 Benjamin Grem was in the market five years and has decided to try in investments own forces. Scrupulously having studied a situation, he has bought shares of company Savold Tire on $2,5 thousand - on $10 for a piece. Soon they have grown to $37. There and then organizers on friendship have offered Benjamin the second share issue which he by inertia has bought already without an estimation of its real cost, and these actions have immediately depreciated. This case cost Gremu of an appreciable part of its private means.
after that it was accepted to completion of the theory of the underestimated companies. Simultaneously a series small, but profitable transactions of Grem could increase the fortune to $50 thousand (the Small shop in New York could then be bought for $7 thousand, and rent of five-room apartments, in which veins of Grem, managed to it in $45 a month.)

the Lazy lecturer
By 1923 Grem became already enough known person. From a post of an analyst he has decided to leave, but firm has not left - it began to operate own trust and all operations spent through Newburger. In its trust devoted clients of the company were enclosed some. The initial capital has made $250 thousand Rule were simple: Grem operates a trust and gets for it annual wages $10 thousand and 20 % of the income over 6 % following the results of fund work. The stipulated 6 % of profitableness of Grem with ease overcame: its methods worked smoothly, and the market was bull . By 1926 the trust has expanded to $450 thousand
In 1928 Grem has found out that actions Nothern Pipe Line stand $65 while in a company active there were reliable bonds for the sum of $95 on each action. Grem has taken shares and has addressed to management of the company with council to sell and bonds, but to it have refused. For end of the transaction it had to buy up 38 % of actions and to enter into company board of directors - only after that Gremu it was possible to insist on the offer. As a result the income has exceeded $100 on the action.
by 1928 Benjamin Grema`s fund has expanded already to $2,5 million (the most part of this money made reinvestitsii Benjamin). Was at it now and the assistant - too graduate Columbia Dzherri Newman.
in the meantime to find the underestimated actions on peregretom the market all it became more difficult. Having estimated a situation, Grem has drawn a conclusion on approach of the long period of decline and has ceased to put up money in the action. As it has then appeared, it is rather provident: Great depression has soon burst.
Grem has returned to native college. He had no objection to tell the interested about the approach to the market analysis - not in the last instance because popularity would help to involve additional partners in a trust. However to teach he thus did not test special desire, and the book did not want to write. And only when there was a possibility to combine both employment, Grem has made the decision. Its only stipulation was, that someone summarised each lecture. So on the basis of these abstracts also there was subsequently a well-known book the Analyst of securities . And in 1929 of lecture of Grema visited every week not less than 150 students.

from black Tuesday for autoinsurance
To stock market Grem crash it was prepared thoroughly. Half of means of its trust has been enclosed in exclusive convertible actions, and on second half of Grem has opened short positions, that is has actually sold without a covering all other actions counting upon their subsequent falling in the price. Thus it used a shoulder 1:2 though at that time usually used a shoulder 1:10. The idea of Grema consisted that in case of the beginning of falling of the market preference shares will become cheaper more slowly, than usual, and he anyway will win.
in black Tuesday 1929 index Dow Jones has fallen off from 380 points to 200. Grem has got profit, having closed positions. But following the results of a year it nevertheless has incurred 20 - percentage losses. However, many that year in general were ruined. In 1930 the trust has lost 50 more % (Dow Jones a year has fallen later to 29 %), - 16 more % (Dow Jones has fallen to 48 %). And in 1932 Grem has lost only 3 % (Dow Jones has fallen to 17 %). To end of crisis the trust of Grema has been seriously exhausted, but remained afloat. After all those few actions which remained with Grema, were, in its opinion, the extremely perspective. By 1933 fund Grema contained hardly less $2 million - all on a quarter less, than before crisis. However, Newman`s father took part in trust support, and the trust began to be called as Newman`s trust - Grema.
the Book the Analyst of securities has been published already after crisis. After ruin of the American stock exchange principles of trade in securities could be built from zero. For the escaped dealers it became invaluable help. Being guided by councils Grema, brokers gradually gave up a habit to speculate on the Stock Exchange as in casino - on growing market such passed, but really deep analysis now was required. Grem recommended to define appeal of actions by two criteria: to potential profitableness and potential risk. Various factors were for this purpose entered: the profit and dividends to cost, obligations to actives, and etc. Before the company did not consider stability of a gain of profit necessary to include such data in reports, and Gremu first quite often was necessary to request them specially.
occurrence of several well-known investors became other result of activity of Grema. Among them and most successful of its pupils Warren Baffet who recognises that uses till now principles of the teacher.
Trast Grema continued to operate till 1956. Its average profitableness for postcrisis years has come nearer to 20 % annual. One of the most successful transactions has been spent in 1948. Grem has found out the extremely attractive company GEICO which was engaged in autoinsurance. Possibility was good, but also risks big: it should to spend for purchase of 50 % of actions about $1 million - a quarter of all trust. It dispersed from habitual Gremu style of a wide diversification. Nevertheless the transaction has taken place, and actions have been distributed between partners of a trust at the price of $27. Their price has come nearer To the end of life of Grema to $54 thousand
gradually exchange activity of Grema began to decrease, and after liquidation of a trust of Newman - Grema Grem has taken a place of managing director GEICO. He has left this post only in 1976, in a year of death. After its death control over GEICO, to that time were on the verge of bankruptcy, has received Warren Baffet, having enclosed in purchase of actions $47 million Even at such price it seemed attractive to the successor of the master of the underestimated actions. Now actives GEICO are estimated in $9 billion
ALEXEY BAJBAKOV