Benjamin Graham · 1996 · McGraw-Hill (edited by Seymour Chatman, posthumous)
Benjamin Graham: The Memoirs of the Dean of Wall Street
Graham recounts in his memoirs a formative case from the mid-1920s involving Northern Pipeline Company, a Standard Oil subsidiary that had been distributed to its shareholders. Reading the company's annual reports, Graham realised that Northern Pipeline held cash and liquid securities far in excess of its market capitalisation, with the operating pipeline almost an afterthought in the valuation. The stock was trading at well below the value of the cash it carried. Graham began buying shares and, more importantly, agitating. He attended the annual meeting, spoke to management, and pushed the board to distribute the surplus securities to shareholders. The board, initially dismissive, eventually agreed to a partial distribution. Graham's campaign is one of the earliest documented activist interventions in the modern mode — a minority shareholder using public filings and the annual-meeting floor to extract value from a static balance sheet. The Northern Pipeline episode crystallised Graham's view that the market regularly leaves cash, securities, and contractual claims unpriced inside operating companies. The pipeline itself was not the value; the value was the liquid assets buried in the balance sheet. Graham treats the episode as proof that careful reading of filings, combined with the willingness to act, can produce returns uncorrelated with the general market and uncorrelated with the analyst's view of the operating business.