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* This remains true, although many of Wall Street’s best analysts hold the title of chartered financial analyst. The CFA certification is awarded by the Association of Investment Management & Research (formerly the Financial Analysts Federation) only after the candidate has completed years of rigorous study and passed a series of difficult exams. More than 50,000 analysts worldwide have been certified as CFAs. Sadly, a recent survey by Professor Stanley Block found that most CFAs ignore Graham’s teachings: Growth potential ranks higher than quality of earnings, risks, and dividend policy in determining P/E ratios, while far more analysts base their buy ratings on recent price than on the long-term outlook for the company. See Stanley Block, “A Study of Financial Analysts: Practice and Theory,” Financial Analysts Journal, July/August, 1999, at www.aimrpubs.org. As Graham was fond of saying, his own books have been read by—and ignored by—more people than any other books in finance.

* It is highly unusual today for a security analyst to allow mere commoners to contact him directly. For the most part, only the nobility of institutional investors are permitted to approach the throne of the almighty Wall Street analyst. An individual investor might, perhaps, have some luck calling analysts who work at “regional” brokerage firms headquartered outside of New York City. The investor relations area at the websites of most publicly traded companies will provide a list of analysts who follow the stock. Websites like www.zacks.com and www.multex.com offer access to analysts’ research reports—but the intelligent investor should remember that most analysts do not analyze businesses. Instead, they engage in guesswork about future stock prices.

† Benjamin Graham was the prime force behind the establishment of the CFA program, which he advocated for nearly two decades before it became a reality.

* The two firms Graham had in mind were probably Du Pont, Glore, Forgan & Co. and Goodbody & Co. Du Pont (founded by the heirs to the chemical fortune) was saved from insolvency in 1970 only after Texas entrepreneur H. Ross Perot lent more than $50 million to the firm; Goodbody, the fifth-largest brokerage firm in the United States, would have failed in late 1970 had Merrill Lynch not acquired it. Hayden, Stone & Co. would also have gone under if it had not been acquired. In 1970, no fewer than seven brokerage firms went bust. The farcical story of Wall Street’s frenzied over-expansion in the late 1960s is beautifully told in John Brooks’s The Go-Go Years (John Wiley & Sons, New York, 1999).

* Nearly all brokerage transactions are now conducted electronically, and securities are no longer physically “delivered.” Thanks to the establishment of the Securities Investor Protection Corporation, or SIPC, in 1970, investors are generally assured of recovering their full account values if their brokerage firm becomes insolvent. SIPC is a government-mandated consortium of brokers; all the members agree to pool their assets to cover losses incurred by the customers of any firm that becomes insolvent. SIPC’s protection eliminates the need for investors to make payment and take delivery through a bank intermediary, as Graham urges.

* Those who heeded Graham’s advice would not have been suckered into buying Internet IPOs in 1999 and 2000.

† This traditional role of bankers has for the most part been supplanted by accountants, lawyers, or financial planners.

1 For a particularly thoughtful discussion of these issues, see Walter Updegrave, “Advice on Advice,” Money, January, 2003, pp. 53–55.

2 If you’re unable to get a referral from someone you trust, you may be able to find a fee-only financial planner through www.napfa.org (or www.feeonly. org), whose members are generally held to high standards of service and integrity.

3 By itself, a customer complaint is not enough to disqualify an adviser from your consideration; but a persistent pattern of complaints is. And a disciplinary action