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On Keynes as an investor

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  • J. E. Woods

Abstract

As Keynes himself admitted in 1938, his approach to portfolio management changed dramatically during the course of his career. He abandoned 'speculation' in favour of 'investment'—namely, a 'careful selection of a few investments … having regard to their cheapness and potential intrinsic value over a period of years ahead'. In other words, he was applying the margin of safety, a concept we particularly associate nowadays with Benjamin Graham, who incorporated it inter alia into his magnum opus of 1934, Security Analysis. An examination of the writings of Keynes, on the one hand, and Graham, on the other, reveals considerable overlap between, not to say unity of, their respective conceptions. Such is their complementarity that it is reasonable to speak of a Keynes–Graham schema. We conclude that this is the natural starting point for the 2011 Kay Review of UK Equity Markets, as it should have been for The Myners Review of UK Institutional Investment a decade ago. Copyright , Oxford University Press.

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  • J. E. Woods, 2013. "On Keynes as an investor," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 37(2), pages 423-442.
    • Handle: RePEc:oup:cambje:v:37:y:2013:i:2:p:423-442
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    File URL: http://hdl.handle.net/10.1093/cje/bes061
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    Cited by:

    1. David Chambers & Elroy Dimson & Justin Foo, 2013. "Keynes, King's, and Endowment Asset Management," NBER Chapters, in: How the Financial Crisis and Great Recession Affected Higher Education, pages 127-150, National Bureau of Economic Research, Inc.
    2. Woods, John E, 2021. "Benjamin Graham on Buffer Stocks," OSF Preprints qdv3n, Center for Open Science.
    3. Carlo Cristiano & Maria Cristina Marcuzzo & Eleonora Sanfilippo, 2018. "Taming the great depression: Keynes’s personal investments in the US stock market, 1931–1939," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 35(1), pages 13-40, April.
    4. David Chambers & Elroy Dimson, 2013. "Retrospectives: John Maynard Keynes, Investment Innovator," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 213-228, Summer.

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