"I should have elaborated in my original email that Ben Graham abandoned his original fee structure in the aftermath of the crash. His fund lost about 70% and the high-water mark approach meant that he would have had to more than triple the money before he could generate any income for himself. All but one of his investors agreed to reset this for a straight 20% of profits (though he doesn't mention what happened to the 6% hurdle). It's also worth mentioning that the Dow returned over 50% in 1928 and Graham's fund 60%.

"My point in mentioning Graham's fee structure is not to sully his reputation - but rather to point out how things are not quite as they seem. Graham himself comes across as embarrassed at his arrogance - for example he documents how he signed a 10-year lease on a sumptuous apartment, to start in late 1929. He writes:

"I had done this by following what I thought to be highly conservative methods, keeping my risks of loss to a minimum compared with the crazy speculation in overvalued securities whirling all about me. What a Wunderkind I was - before the catastrophe!"

David Fuller's view Thanks for the additional history and insights. The self-effacing quote only increases my respect for Benjamin Graham who was sufficiently secure to admit a mistake and learn from it. Overconfidence is costly because it undermines our grounding in common sense. Every experienced investor has grappled with this, been humbled, and learned from the consequences.