Benjamin Graham did not sell all his stocks before 1929 Stock Market Crash

Benjamin Graham, the Dean of Wall Street, did not sell all his stocks before the 1929 Stock Market Crash.

For those who do not know who Benjamin Graham is, you can remember him as the teacher of Warren Buffett. 

Warren Buffett studied under him, and worked for him for a while after graduation.

In fact, many famous Wall Street investors learnt from Benjamin Graham, and many of them achieved great successes, even greater than that of their teacher.

When I read about the loss of Benjamin Graham during the Great Depression in his memoir, I am very shocked to see that.

I would expect that Benjamin Graham, one of the greatest investors who ever lived, would sell to avoid losses in the great stock market crash of 1929.

As it is, he did not even though he knew that crash was imminent.

Benjamin Graham wrote that, “Agrees with Baruch that Crash is imminent, but unlike Baruch, leaves portion of portfolio in stock market.”

This serves as a lesson for all investors.

When a stock market crash is so obvious, it is time to sell all. 

While many fools lost their money during the Great Depression because they were not aware that the market crash was imminent, Benjamin Graham did see that.

The fact that he knew, and took no action is a great lesson for every one of us.

It is better to delay entering the market.  There is nothing wrong with keeping the money in the bank until the right opportunity comes.

However, when it is time to sell, and you do not sell, you may have to wait 30 years to recoup the loss.

Stock market crash does not come without notice.  Many investors know instinctively that a crash is near, but not all have the wisdom to sell.

The Wall Street took about 30 years to recover to the level before the Great Depression.  Not many of us have the patience to wait 30 years for the stock market to recover.

Image credit to Pixabay