David Dodd and his wife, Elsie, at a 1972
Columbia Business School award ceremony.
Courtesy of David Anderson
Courtesy of George School
Barbara Dodd Anderson cutting ribbon on the new George School library in 1997
with her granddaughter, Mollie Dodd Anderson, as Warren Buffett looks on.
of students in the tradition of Graham &
Dodd until 1978. After retirement he continued
to live with his wife, Elsie, in their
apartment at 39 Claremont Avenue.
He did some consulting and worked
extensively on both the 1962 and 1988
editions of Security Analysis. He also was
instrumental in helping GEICO survive
a huge $126,500,000 loss caused by overexpansion
during the 1973–75 recession.
David Anderson, Dodd’s grandson, has
many fond recollections of his grandfather
in retirement. Each summer, the whole
family spent two months in their family
cottage on Chebeague Island, off the
coast of Maine. He affectionately called his
grandfather “Pop” and remembers spending
a lot of quality time with him over
many years, including fishing on the local
pier. He remembers him as “a wonderful
grandfather.” He also describes him as
being highly respected by everyone who
knew him.
In January 1981, Dodd’s wife, Elsie,
passed away. He maintained his New York
apartment but lived at Chebeague Island
from late spring through the fall. He later
married Lilian Brown, who also had a
summer cottage on the island. When they
married, they purchased a winter house in
Falmouth Foreside, on the coast of Maine,
just west of the island, and lived there until
Dodd’s death in 1988.
50 Years of Security Analysis (1984)
1984 was a great year in the history of value
investing. In May, Michael Sovern, president
of Columbia University, awarded
Dodd an honorary doctorate of letters.
Sovern told Dodd: “You have applied
your financial theories with brilliant
results in the highly competitive world of
investments.”
Also in May, Buffett gave a now-famous
speech at Columbia Business School, entitled
“The Super Investors of Graham and
Doddsville” which he delivered at a seminar
marking the 50th anniversary of Security
Analysis. These investors included
himself; Walter Schloss; Tom Knapp of
Tweedy, Browne; Bill Ruane of the Sequoia
Fund; Charlie Munger and others.
Buffett’s speech challenged the prevailing
conventional wisdom that stocks are
efficiently priced by detailing the performance
of eight disciples of Graham and
Dodd, including himself. According to
Buffett, these disciples all shared a “common
intellectual theme… They search
for discrepancies between the value of
the business and the price of small pieces
of that business in the market… Our
Graham and Dodd investors, needless to
say, do not discuss beta, the capital asset
pricing model, or covariance in returns
among securities… The investors simply
focus on two variables: price and value.”
The third event of 1984 was Murray’s
profile of “Graham and Dodd: A Durable
Discipline,” in the Financial Analysts Journal’s
50th anniversary edition of the publication
of their book. Murray, Graham and
Dodd’s successor at Columbia, wrote that
their “disciplined approach to financial
analysis represents a permanent enhancement
of the quality of decision-making
in finance and a lasting contribution to
the increased efficiency of markets in the
allocation of resources.” He noted their
influence on developing the “concept of
earning power, as distinct from reported
earnings... [which] led directly to the valuation
of companies, instead of stock certificates.”
Murray continued:
But Graham and Dodd’s contribution
did not stop with the publication
of Security Analysis. The authors
were inveterate teachers, whether in
14 FINANCIAL HISTORY | Summer 2020 | www.MoAF.org