One of my favorite Benjamin Graham investments to review is his early career investment in the Northern Pipeline. In 1911, the Supreme Court ordered that the Standard Oil Trust be broken into over fifty separate entities, and he began to study the various pipelines that were being split up into eight entities.
Since the pipelines amounted to less than one-seventh of the overall Standard Oil empire, and since the Northern Pipeline was just one of the eight pipeline entities becoming its own after the breakup, the Standard Oil income statements do not classify Northern Pipeline according to anything that would resemble a balance sheet overview–investors were only given access to the net income and other similar figures.
When Graham himself began to study the pipelines, he personally traveled to Washington, D.C. in order to pick up copies of each of the … Read the rest of this article!
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