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The Intelligent Investor
More than one million hardcovers sold
Now available for the first time in paperback!
The Classic Text Annotated to Update Graham's Timeless Wisdom for Today's Market Conditions
The greatest investment advisor of the twentieth century, Benjamin Graham taught and inspired people worldwide. Graham's philosophy of "value investing" -- which shields investors from substantial error and teaches them to develop long-term strategies -- has made The Intelligent Investor the stock market bible ever since its original publication in 1949.
Over the years, market developments have proven the wisdom of Graham's strategies. While preserving the integrity of Graham's original text, this revised edition includes updated commentary by noted financial journalist Jason Zweig, whose perspective incorporates the realities of today's market, draws parallels between Graham's examples and today's financial headlines, and gives readers a more thorough understanding of how to apply Graham's principles.
Vital and indispensable, this HarperBusiness Essentials edition of The Intelligent Investor is the most important book you will ever read on how to reach your financial goals.
Now available for the first time in paperback!
The Classic Text Annotated to Update Graham's Timeless Wisdom for Today's Market Conditions
The greatest investment advisor of the twentieth century, Benjamin Graham taught and inspired people worldwide. Graham's philosophy of "value investing" -- which shields investors from substantial error and teaches them to develop long-term strategies -- has made The Intelligent Investor the stock market bible ever since its original publication in 1949.
Over the years, market developments have proven the wisdom of Graham's strategies. While preserving the integrity of Graham's original text, this revised edition includes updated commentary by noted financial journalist Jason Zweig, whose perspective incorporates the realities of today's market, draws parallels between Graham's examples and today's financial headlines, and gives readers a more thorough understanding of how to apply Graham's principles.
Vital and indispensable, this HarperBusiness Essentials edition of The Intelligent Investor is the most important book you will ever read on how to reach your financial goals.
623 pages, Paperback
First published January 1, 1949
About the author
Benjamin Graham
118 books1,576 followersBenjamin Graham was a British-born American financial analyst, investor and professor. He is widely known as the "father of value investing", and wrote two of the discipline's founding texts: Security Analysis (1934) with David L. Dodd, and The Intelligent Investor (1949). His investment philosophy stressed independent thinking, emotional detachment, and careful security analysis, emphasizing the importance of distinguishing the price of a stock from the value of its underlying business.
After graduating from Columbia University at age 20, Graham started his career on Wall Street, eventually founding Graham–Newman Corp., a successful mutual fund. He also taught investing for many years at Columbia Business School, where one of his students was Warren Buffett. Graham later taught at UCLA Anderson School of Management at the University of California, Los Angeles.
Graham laid the groundwork for value investing at mutual funds, hedge funds, diversified holding companies, and other investment vehicles. He was the driving force behind the establishment of the profession of security analysis and the Chartered Financial Analyst designation. He also advocated the creation of index funds decades before they were introduced. Throughout his career, Graham had many notable disciples who went on to earn substantial success as investors, including Irving Kahn and Warren Buffett, who described Graham as the second most influential person in his life after his own father. Among other well-known investors influenced by Graham were Charles D. Ellis, Mario Gabelli, Seth A. Klarman, Howard Marks, John Neff and John Marks Templeton.
After graduating from Columbia University at age 20, Graham started his career on Wall Street, eventually founding Graham–Newman Corp., a successful mutual fund. He also taught investing for many years at Columbia Business School, where one of his students was Warren Buffett. Graham later taught at UCLA Anderson School of Management at the University of California, Los Angeles.
Graham laid the groundwork for value investing at mutual funds, hedge funds, diversified holding companies, and other investment vehicles. He was the driving force behind the establishment of the profession of security analysis and the Chartered Financial Analyst designation. He also advocated the creation of index funds decades before they were introduced. Throughout his career, Graham had many notable disciples who went on to earn substantial success as investors, including Irving Kahn and Warren Buffett, who described Graham as the second most influential person in his life after his own father. Among other well-known investors influenced by Graham were Charles D. Ellis, Mario Gabelli, Seth A. Klarman, Howard Marks, John Neff and John Marks Templeton.
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July 23, 2013
Benjamin Graham’s last line in The Intelligent Investor sums up the entire book in his trade-mark common-sense way: “ To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks.”
First published in 1949, this version that I read was re-published in 2005 with a forward written by John Bogle who started Vangard Mutual Fund. Bogle’s forward serves as a very good summary of The Intelligent Investor, highlighting key points clearly. So I found it useful to read the forward again after finishing the book as a quick refresh of its content.
Graham’s language may be a bit old fashioned, so some may find his writing style takes a little bit of getting used to. However, once I got my pace of reading going, I find the old fashion style gives me a sense of comfort and assurance – as if a grandfather was sharing all his valuable experience with me. Certainly good things stand the test of time, just as sound values: “Sound investment principles generally produced sound investment results…we must act on the assumption that they would continue to do so.”
Graham is very clear form the start that he is not writing for speculators but for the layman who wants to have a sound approach to grow his weath steadily. He believes that lay investors can achieve “a creditable if unspectacular result with a minimum of effort and capability…since anyone – by just buying and holding a representative list – can equal the performance of the market averages…”
He warned those who tries to beat the market, as many smart people have tied to do this and failed. How he explained this makes a lot of sense to me - every stock market broker thinks he can outdo the market. That means the stock market experts as a whole is trying to beat itself – a logical contradiction. They just cancel each other out.
Thus, one should not rely on a financial advisor who promises the sky and raise your hopes that he can do better that the market average. That, claims Graham, is not possible.
“The real money in investing will have to be made, as most of it has been in the past, not out of buying and selling but out of owning and holding securities, receiving interest and dividends and benefiting form their longer-term increase in value.”
Graham chastises average investors for their sloth and ignorance, for willingly giving up their responsibility and rights as business owners to management. This, he feels, is due to the institutionalisation of financial services which has left investors a step removed from ownership.
He disagrees with the commonly held view that “If you don’t like the management, sell the stock.” He feels this does nothing to improve bad management, only puts down the price of the stock and shifts the ownership to someone else. “Investors as a whole seem to have abandoned all claim to control over the paid superintendents of their property.”
Ultimately, it is important for investors to give themselves a margin of safety by buying a stock at a price that is lower that its appraised value and to diversify the portfolio. These would put the investors in good stead, as against speculators.
I like this book. It does not give you many formulas for security analysis (Graham says you can read further in his earlier book Security Analysis). What The Intelligent Investor does is that it lays the foundation for laymen by giving a sound approach to investment, written with common sense and simplicity.
First published in 1949, this version that I read was re-published in 2005 with a forward written by John Bogle who started Vangard Mutual Fund. Bogle’s forward serves as a very good summary of The Intelligent Investor, highlighting key points clearly. So I found it useful to read the forward again after finishing the book as a quick refresh of its content.
Graham’s language may be a bit old fashioned, so some may find his writing style takes a little bit of getting used to. However, once I got my pace of reading going, I find the old fashion style gives me a sense of comfort and assurance – as if a grandfather was sharing all his valuable experience with me. Certainly good things stand the test of time, just as sound values: “Sound investment principles generally produced sound investment results…we must act on the assumption that they would continue to do so.”
Graham is very clear form the start that he is not writing for speculators but for the layman who wants to have a sound approach to grow his weath steadily. He believes that lay investors can achieve “a creditable if unspectacular result with a minimum of effort and capability…since anyone – by just buying and holding a representative list – can equal the performance of the market averages…”
He warned those who tries to beat the market, as many smart people have tied to do this and failed. How he explained this makes a lot of sense to me - every stock market broker thinks he can outdo the market. That means the stock market experts as a whole is trying to beat itself – a logical contradiction. They just cancel each other out.
Thus, one should not rely on a financial advisor who promises the sky and raise your hopes that he can do better that the market average. That, claims Graham, is not possible.
“The real money in investing will have to be made, as most of it has been in the past, not out of buying and selling but out of owning and holding securities, receiving interest and dividends and benefiting form their longer-term increase in value.”
Graham chastises average investors for their sloth and ignorance, for willingly giving up their responsibility and rights as business owners to management. This, he feels, is due to the institutionalisation of financial services which has left investors a step removed from ownership.
He disagrees with the commonly held view that “If you don’t like the management, sell the stock.” He feels this does nothing to improve bad management, only puts down the price of the stock and shifts the ownership to someone else. “Investors as a whole seem to have abandoned all claim to control over the paid superintendents of their property.”
Ultimately, it is important for investors to give themselves a margin of safety by buying a stock at a price that is lower that its appraised value and to diversify the portfolio. These would put the investors in good stead, as against speculators.
I like this book. It does not give you many formulas for security analysis (Graham says you can read further in his earlier book Security Analysis). What The Intelligent Investor does is that it lays the foundation for laymen by giving a sound approach to investment, written with common sense and simplicity.
January 23, 2010
Warren Buffett's pick as the greatest investment book of all time, and it really does live up to that review. Some highlights:
1) Your main goal should be to not LOSE money; so understand the distinction between 'investing' and 'speculating,' and understand that most so-called investors are actually speculators. Minimize the extent to which you are a speculator. If you go in trying to get rich quick, you'll lose.
2) To that end, trailing P/E should be less than 15 and P/E * P/B (tangible) should be < or = 22.5.
3) But don't buy SIMPLY because the company is cheap; look for EPS growth ideally > 30% (cumulative) over the course of the prior 10 years. This is a good indicator of a stable and sound business model.
4) Look for a current ratio (current assets / current liabilities) greater than 2, as a signal the company is financially secure.
5) Strongly prefer companies with dividends, and with consistent dividend growth.
6) Don't invest in companies that have had negative earnings-per-share in the last three years.
7) But Graham's real key is PSYCHOLOGY: Market crashes should be thought of as exciting and delightful fire sales on the best stocks. By contrast, be terrified when the market has gone up far, fast, and RESIST THE URGE TO START buying more stock when the market is up. (People criticize Graham for advocating market-timing, but really he advocates a form of dollar-cost-averaging, where one increasingly invests in companies that look objectively undervalued when the market goes down, and (assuming one doesn't hold forever) divests slowly as the market goes up, if in one's view one's individual stocks become over-valued -- he does not advocate investing or divesting simply because the market goes down or up, one always looks at individual companies.)
He also has very interesting discussions of bonds, though I found them less relevant because I don't invest in bonds directly. To Graham, incidentally, Buffett added: A) know when to break these rules; B) prefer companies with wide inherent 'moats' (his famous example is that if you gave him a billion dollars today, he could not create a brand that would compete effectively with Coca Cola); C) buy private, illiquid-but-outstanding businesses on the cheap -- e.g., See's Candies; D) own and use an insurance company business to create 'float' from premiums that can be used for investing; E) invest in what you can understand. Sadly "C" and "D" are not feasible for the rest of us, but between Buffett and Graham the small-time investor has about all he/she needs in order to at least not get hosed!
1) Your main goal should be to not LOSE money; so understand the distinction between 'investing' and 'speculating,' and understand that most so-called investors are actually speculators. Minimize the extent to which you are a speculator. If you go in trying to get rich quick, you'll lose.
2) To that end, trailing P/E should be less than 15 and P/E * P/B (tangible) should be < or = 22.5.
3) But don't buy SIMPLY because the company is cheap; look for EPS growth ideally > 30% (cumulative) over the course of the prior 10 years. This is a good indicator of a stable and sound business model.
4) Look for a current ratio (current assets / current liabilities) greater than 2, as a signal the company is financially secure.
5) Strongly prefer companies with dividends, and with consistent dividend growth.
6) Don't invest in companies that have had negative earnings-per-share in the last three years.
7) But Graham's real key is PSYCHOLOGY: Market crashes should be thought of as exciting and delightful fire sales on the best stocks. By contrast, be terrified when the market has gone up far, fast, and RESIST THE URGE TO START buying more stock when the market is up. (People criticize Graham for advocating market-timing, but really he advocates a form of dollar-cost-averaging, where one increasingly invests in companies that look objectively undervalued when the market goes down, and (assuming one doesn't hold forever) divests slowly as the market goes up, if in one's view one's individual stocks become over-valued -- he does not advocate investing or divesting simply because the market goes down or up, one always looks at individual companies.)
He also has very interesting discussions of bonds, though I found them less relevant because I don't invest in bonds directly. To Graham, incidentally, Buffett added: A) know when to break these rules; B) prefer companies with wide inherent 'moats' (his famous example is that if you gave him a billion dollars today, he could not create a brand that would compete effectively with Coca Cola); C) buy private, illiquid-but-outstanding businesses on the cheap -- e.g., See's Candies; D) own and use an insurance company business to create 'float' from premiums that can be used for investing; E) invest in what you can understand. Sadly "C" and "D" are not feasible for the rest of us, but between Buffett and Graham the small-time investor has about all he/she needs in order to at least not get hosed!
November 9, 2008
OK, the recent stock market drops scared me. I got hit by the drops in 99 and said I would never let it happen again. This time I had what I thought would be value stocks. The problem was I didn't know if I should sell or hold the stocks. So for $8 I bought a used copy of Ben Graham's book. I stopped reading my other book and read this book like crazy.
It was the best $8 ever spent. It teaches you some basics about the behavior of the market and it teaches you to be very careful. I learned some key's to determining the value of stocks and to buy stocks with a margin of safety relative to other stocks. I did find that some of my "Value Stocks" weren't all that great.
I absolutely recommend this book, especially right now. Now is a great opportunity to pick up value stocks that have dropped a bunch. They dropped not because that are bad stocks but because Mr. Market has dropped and they've been pulled down.
It was the best $8 ever spent. It teaches you some basics about the behavior of the market and it teaches you to be very careful. I learned some key's to determining the value of stocks and to buy stocks with a margin of safety relative to other stocks. I did find that some of my "Value Stocks" weren't all that great.
I absolutely recommend this book, especially right now. Now is a great opportunity to pick up value stocks that have dropped a bunch. They dropped not because that are bad stocks but because Mr. Market has dropped and they've been pulled down.
May 24, 2015
I had high expectations from the book, which it failed to meet. But then, this book is too old to have a lot of relevance now.
The essence is that an intelligent investor is one who doesn’t think of this as gambling. Do solid fundamental, qualitative analysis rather than looking at charts. Know what the company stands for. And you can’t beat the market.
Maybe if you know nothing about the stock market, then this book is for you to get an idea of what you are getting into and what to expect.
The first 10 chapters were a drag. They should’ve been 10 pages max, with examples. This is the content in it’s entirety:
-No one can beat the market consistently.
-Dollar cost averaging. Invest the same number of dollars in stocks each month. This way you buy more when cheap and less when expensive
-You cannot beat the market even if you are an active investor.
-Think long term, index funds
-Qualitative analysis over speculation
-Diversify. Look for large companies with dividends
-Buy cheap, sell high and NOT vice versa (most people get this wrong)
-purchase of bargain issues
-invest in closed end funds
Couldn’t go through the last 3-4 chapters, since I ran out of patience.
Some notes from chapter 11-16:
Estimating value of a stock:
future earnings.
general long term prospects
management in the company
financial strength and capital structure
dividend record
earning*(8.5+2*growth rate)
Earnings per share:
beware of tricky caveats intended to bump earnings.
learn how to see fishy stuff in earnings.
read backwards, read more, read the footnotes of earnings report.
Things to look at in a company:
Profitability
Stability
Growth
Financial Position.
Dividends
Price History.
Seven statistical requirements for inclusion in a defensive investor’s portfolio:
-Adequate size.
-A sufficiently strong financial condition.
For industrial companies current assets should be at least twice current liabilities—a so-called two-to-one current ratio. Also, long- term debt should not exceed the net current assets (or “working capital”). For public utilities the debt should not exceed twice the stock equity (at book value).
Continued dividends for at least the past 20 years.
-No earnings deficit in the past ten years.
-Ten-year growth of at least one-third in per-share earnings.
-Price of stock no more than 11⁄2 times net asset value.
-Price no more than 15 times average earnings of the past three years.
The essence is that an intelligent investor is one who doesn’t think of this as gambling. Do solid fundamental, qualitative analysis rather than looking at charts. Know what the company stands for. And you can’t beat the market.
Maybe if you know nothing about the stock market, then this book is for you to get an idea of what you are getting into and what to expect.
The first 10 chapters were a drag. They should’ve been 10 pages max, with examples. This is the content in it’s entirety:
-No one can beat the market consistently.
-Dollar cost averaging. Invest the same number of dollars in stocks each month. This way you buy more when cheap and less when expensive
-You cannot beat the market even if you are an active investor.
-Think long term, index funds
-Qualitative analysis over speculation
-Diversify. Look for large companies with dividends
-Buy cheap, sell high and NOT vice versa (most people get this wrong)
-purchase of bargain issues
-invest in closed end funds
Couldn’t go through the last 3-4 chapters, since I ran out of patience.
Some notes from chapter 11-16:
Estimating value of a stock:
future earnings.
general long term prospects
management in the company
financial strength and capital structure
dividend record
earning*(8.5+2*growth rate)
Earnings per share:
beware of tricky caveats intended to bump earnings.
learn how to see fishy stuff in earnings.
read backwards, read more, read the footnotes of earnings report.
Things to look at in a company:
Profitability
Stability
Growth
Financial Position.
Dividends
Price History.
Seven statistical requirements for inclusion in a defensive investor’s portfolio:
-Adequate size.
-A sufficiently strong financial condition.
For industrial companies current assets should be at least twice current liabilities—a so-called two-to-one current ratio. Also, long- term debt should not exceed the net current assets (or “working capital”). For public utilities the debt should not exceed twice the stock equity (at book value).
Continued dividends for at least the past 20 years.
-No earnings deficit in the past ten years.
-Ten-year growth of at least one-third in per-share earnings.
-Price of stock no more than 11⁄2 times net asset value.
-Price no more than 15 times average earnings of the past three years.
March 22, 2015
If you read investing books or magazines, you've undoubtedly heard of Benjamin Graham. He's considered the father of value investing, and Warren Buffett is one of his disciples. In fact, The Oracle of Omaha called this book "the best book about investing ever written."
I have to disagree with Buffett on this one, but that's because I'm a very different type of investor than Buffett. I'm a Boglehead (follower of Vanguard founder John Bogle), so I invest through broadly diversified, passive index funds instead of individual stocks and bonds. I read this book to learn Graham's general investing advice and opinion of the market, not to learn his formulas for analyzing the values of stocks and bonds.
Much of the book's data is understandably stale, since it was first published in 1949. You can definitely tell it was written in the pre-Internet era of investing, before people had easy access to mutual funds, ETFs, 401(k)s, IRAs, and day trading.
Although the financial world has changed much since his time, Graham's fundamentals remain solid. For most investors, he recommends a diverse portfolio of bonds and stocks held for the long-term. He strongly advises against trying to time the market, and says to never invest in something you don't understand. Graham warns against being an emotional investor; he says to invest based on arithmetic, not optimism.
Notes
Graham divides investors into 2 camps: defensive and enterprising. The defensive investor is risk-averse, seeking to preserve capital and obtain a reasonable return. The enterprising investor is more risk-tolerant, willing and able to analyze stocks and bonds to find higher returns.
Defensive portfolio
• 25-75% US bonds, depending on investor's risk tolerance and situation
• common stocks of "leading" or "prominent" US companies (blue chips), purchased at a reasonable price based on historical data
Enterprising portfolio
• buy low, sell high
• growth stocks
• value stocks
• take advantage of "special situations" like mergers and acquisitions, business reorganizations, etc.
You can't forecast or time the market.
Unless you're forced to sell your shares, you shouldn't care about share prices. Ignore the daily ups and downs of the market.
Use dollar cost averaging or formula timing plans to remove the psychological factors of investing.
Risk vs safety
Risky investments are those that have a chance of declining in price, but a history of positive returns. You don't care about temporary declines as long as you hold the investment, because it's not until you sell that the decline would be realized.
Unsafe investments are those with history of poor returns over many years; these are not wise investments.
Prices sometimes reflect the present, and sometimes reflect the future; because you can't tell which, it's hard to determine if stocks are fairly priced.
Margin of safety
Margin of safety is the secret to sound investing.
This is a business' value over its debt (its ability to earn more than it needs to cover its expenses), or the difference between price and value.
Guarantees a better chance of profit than loss (not a guaranteed profit).
Diversification across several stocks increases the certainty of profit.
The margin is based on statistical data, not speculation.
I have to disagree with Buffett on this one, but that's because I'm a very different type of investor than Buffett. I'm a Boglehead (follower of Vanguard founder John Bogle), so I invest through broadly diversified, passive index funds instead of individual stocks and bonds. I read this book to learn Graham's general investing advice and opinion of the market, not to learn his formulas for analyzing the values of stocks and bonds.
Much of the book's data is understandably stale, since it was first published in 1949. You can definitely tell it was written in the pre-Internet era of investing, before people had easy access to mutual funds, ETFs, 401(k)s, IRAs, and day trading.
Although the financial world has changed much since his time, Graham's fundamentals remain solid. For most investors, he recommends a diverse portfolio of bonds and stocks held for the long-term. He strongly advises against trying to time the market, and says to never invest in something you don't understand. Graham warns against being an emotional investor; he says to invest based on arithmetic, not optimism.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks."
"The real money in investing will have to be made - as most of it has been in the past - not out of buying and selling, but out of owning and holding securities, receiving interest and dividends, and benefiting from their long-term increase in value."
Notes
Graham divides investors into 2 camps: defensive and enterprising. The defensive investor is risk-averse, seeking to preserve capital and obtain a reasonable return. The enterprising investor is more risk-tolerant, willing and able to analyze stocks and bonds to find higher returns.
Defensive portfolio
• 25-75% US bonds, depending on investor's risk tolerance and situation
• common stocks of "leading" or "prominent" US companies (blue chips), purchased at a reasonable price based on historical data
Enterprising portfolio
• buy low, sell high
• growth stocks
• value stocks
• take advantage of "special situations" like mergers and acquisitions, business reorganizations, etc.
You can't forecast or time the market.
Unless you're forced to sell your shares, you shouldn't care about share prices. Ignore the daily ups and downs of the market.
Use dollar cost averaging or formula timing plans to remove the psychological factors of investing.
Risk vs safety
Risky investments are those that have a chance of declining in price, but a history of positive returns. You don't care about temporary declines as long as you hold the investment, because it's not until you sell that the decline would be realized.
Unsafe investments are those with history of poor returns over many years; these are not wise investments.
Prices sometimes reflect the present, and sometimes reflect the future; because you can't tell which, it's hard to determine if stocks are fairly priced.
Margin of safety
Margin of safety is the secret to sound investing.
This is a business' value over its debt (its ability to earn more than it needs to cover its expenses), or the difference between price and value.
Guarantees a better chance of profit than loss (not a guaranteed profit).
Diversification across several stocks increases the certainty of profit.
The margin is based on statistical data, not speculation.
May 12, 2022
Frankly speaking, this book is not easy to understand if you don’t have any knowledge of share markets. A lot of financial jargon and terms were used to explain the investment.
I recommend reading it because there are a lot of principles and analyses of buying shares, bonds, etc.
A must-read book for market share investment with examples of public listed companies' statistics and graphs.
To sum up, we can invest by following the author’s golden rules.
“Never buy a stock immediately after a substantial rise or sell one immediately after a substantial drop. “
It simply means being patient, disciplined, and eager to learn; you must also be able to harness your emotions and think for yourself.
I recommend reading it because there are a lot of principles and analyses of buying shares, bonds, etc.
A must-read book for market share investment with examples of public listed companies' statistics and graphs.
To sum up, we can invest by following the author’s golden rules.
“Never buy a stock immediately after a substantial rise or sell one immediately after a substantial drop. “
It simply means being patient, disciplined, and eager to learn; you must also be able to harness your emotions and think for yourself.
November 10, 2013
Okay, this is the book to read if you are serious about investing in stocks. Benjamin Graham's "value investing" method is the time-tested "choose 'em carefully and hold 'em" long-term strategy used by Warren Buffett. Benjamin Graham is the man that Warren Buffett calls The Man. So, you know, if you want to be rich like Warren Buffett, read this book.
... Of course it's not that easy. This book is long, dense, and dry. And even if you read and absorb every page, you're still not going to be Warren Buffett. But you'll be a lot more informed about stock investing. Most of it is about how to analyze the actual long-term value of a stock, which means diving deep into company financial statements. Not just picking one based on a favorable history or because you think you can predict a stock is about to take off because you're sure the company is the next Apple. (Hey, remember in the 80s when Apple seemed all but dead? Meanwhile, how's that Kodak stock looking?)
Make no mistake, this is not one of those self-help "How to beat the market" books. It's pretty much a textbook, with graphs and charts and long complicated financial terms that you need to study as seriously as you studied for your college final exams (well, maybe more seriously than that) if you're really going to get anything out of it. It is not for the dabbler, the mildly interested, or the "can't wrap my head around complicated formulas" investor.
No, no, I have not gotten rich like Warren Buffett. I didn't buy Apple in the 80s, either.
... Of course it's not that easy. This book is long, dense, and dry. And even if you read and absorb every page, you're still not going to be Warren Buffett. But you'll be a lot more informed about stock investing. Most of it is about how to analyze the actual long-term value of a stock, which means diving deep into company financial statements. Not just picking one based on a favorable history or because you think you can predict a stock is about to take off because you're sure the company is the next Apple. (Hey, remember in the 80s when Apple seemed all but dead? Meanwhile, how's that Kodak stock looking?)
Make no mistake, this is not one of those self-help "How to beat the market" books. It's pretty much a textbook, with graphs and charts and long complicated financial terms that you need to study as seriously as you studied for your college final exams (well, maybe more seriously than that) if you're really going to get anything out of it. It is not for the dabbler, the mildly interested, or the "can't wrap my head around complicated formulas" investor.
No, no, I have not gotten rich like Warren Buffett. I didn't buy Apple in the 80s, either.
December 3, 2012
To be honest, the commentary and footnotes of this book were more useful to me than the original content. The book in its original form is obviously outdated in terms of the specific examples it gives for ways to invest and the different companies it details. However, the commentary by Jason Zweig draws from the fundamental messages behind the book to provide more up-to-date advice on how to invest. Undoubtedly, Benjamin Graham provided the foundation for the commentary with his book, but I personally found Zweig's portions easier to read and relate to.
I'd recommend The Random Walk Guide to Investing: Ten Rules for Financial Success for a simpler, more straight-forward alternative to this book. It's not that I wouldn't advise anyone to read The Intelligent Investor, it's just that if you don't have the time to plod your way through Graham's outdated details, either skip straight to the commentary, or check out Malkiel's book. You won't go wrong either way, and you definitely won't go wrong if you want to try and read this thing in its entirety. It was just difficult for me to do so.
I'd recommend The Random Walk Guide to Investing: Ten Rules for Financial Success for a simpler, more straight-forward alternative to this book. It's not that I wouldn't advise anyone to read The Intelligent Investor, it's just that if you don't have the time to plod your way through Graham's outdated details, either skip straight to the commentary, or check out Malkiel's book. You won't go wrong either way, and you definitely won't go wrong if you want to try and read this thing in its entirety. It was just difficult for me to do so.
February 26, 2023
This book is an excellent book for anyone investing in the stock market. It is a classic.
September 9, 2014
To be honest, I have never seen such a terrible book. I just can't imagine that this book worth nearly $22. Actually, it is too expensive for me to afford this book because it cost me almost all my pocket money. But it doesn't worth such much money. When I am reading this book, I can't see anything about investing. I even don't believe the author can speak English. There are so many stupid mistakes like spelling mistakes and grammar mistakes. And through the articles that Benjamin Graham wrote, I can't imagine that he is the father if value investing. There is little doubt that this book is just rubbish. And nobody can invest well if they read this book. This book is just rubbish and the author is really stupid. I really want to throw this stupid book away and burn all the books that this author wrote.
March 19, 2020
لكم وددت أن أقص عليكم قصتي مع هذا الكتاب المستوفي لشروط العبقرية
أولا : الكتاب ثمنه 630 جنيه ولا يوجد نسخة الكترونية مهما أضناك البحث والتنقيب, فلا مفر من شراءه, وحسنا فعلت, لأن قيمته جلية بازغة في كل فقرة وهامش .. حتى حاشيته, فادخرت من راتبي مبلغاً شهريا على مدار عدة شهور متتالية حتى اشتريته في النهاية.
ثانيا: لا يوجد قائمة بأفضل ما تم كتابته عن الاستثمار عامة او البورصة خاصة تخلو من هذا الكتاب( بل احياناً يكون على قائمة الترشيحات), مع الأخذ بعين الاعتبار ان مؤلفه بنيامين جراهام ( أحد مؤسسي علم الاستثمار المبني على القيمة), و مرشح لك من وارين بافيت ( ثالث أغنى رجل في العالم وقت كتابة المراجعة ), فكيف يعقل ألا يكون بهذا الثراء المتوقع.
ثالثا : لا تخبر أحد انك اشتريت كتاباً ثمنه باهظا كذلك الكتاب, فبعض الناس لا تستسيغ القيمة.
الهدف الرئيسي من قراءتك لهذا الكتاب ان تتحكم في ادارة اموالك عبر تحجيم فرص تكبدك للخسائر اذا ما سلكت درب البورصة كأحد قنوات الاستثمار المعروفة, لكن ما وقع كلمة بورصة عليك في البداية ؟ .. اود ان أذكرك ان الإنسان عدو ما يجهل, ولهذا واجه مخاوفك وأقرأ عن ما تخشاه لعله ليس بكائن. البورصة كلمة كانت مرعبة بالنسبة لي مرتبطة دائما بكلمة الخسارة و الافلاس.
الكتاب تم تأليفه تقريبا في عام 1949 *
وهو صالح حتى الآن للاستفادة منه, يشرح بعمق - يحتاج مرجعيه أحيانا - بعض المفاهيم و الاستراتيجيات الاستثمارية الواجب الالمام بها. منها على سبيل المثال :
هامش الأمان
توسيط التكلفة
القيمة الجوهرية
التنويع الكمي
أنواع المحافظ الاستثمارية
أدوات تصنيف الاسهم
أنواع الاوراق الماية
و أنواع المستثمرين
وغيرها من النقاط الرئيسية في عالم يعج بالغموض... مرتكزا في الغالب على التاريخ لكبرى الشركات ونتائجها في الماضي, مكونا بذلك مرجعية غنية - و دسمة في نفس الوقت - لكل شخص مشرف على محاولة فهم كيفية عمل السوق.
ان ما تزرعه يداك لا ينمو سريعاً, لكنه لا يموت. هذا ما ينطبق على الاستثمار في البورصة, فلن تصبح ثريا بين عشية او ضحاها, حتى لو انتهجت المضاربة كمدرسة ربحية, فتأكد انك تقترب من الخسارة الحتمية. وهذا ما ينهى عنه جراهام في كتابه, فهو يدعوك كمستثمر و ليس كمضارب , و الفارق عظيم.
من اليسير ان تعيش في هذا العالم و أنت محكوم بآراء الأخرين, ومن اليسير كذلك ان تعيش عزلتك وأنت محكوم بآرائك, ولكن الرجل العظيم هو الذي يحتفظ باستقلال عزلته في أعذب صورها حتى وهو في وسط الأخرين. فما أكثر الشائعات التي ستتلقاها عن السوق من حيث الربحية المنتظرة او الخسارة المتوقعة, ولهذا شدد جراهام على التمسك بالرأي و عدم الانجراف لتيار التوجه الجمعي.
النقطة المفصلية في رؤيتك لاستثماراتك انك لا ترى الاسهم المشتراه سلعة في حد ذاتها, ولكنها ملكية او شراكة فعلية في مشروع قائم, من هنا تتغير نظرتك لأموالك واستثماراتك, فتتحول لا إراديا من مضارب على السعر إلى مستثمر في القيمة, مع التنويه على ان السوق عادة ما ينقسم بين متشائم و متفائل, فلتشتري من المتشائمين و لتبيع للمتفائلين( وهذا يحكمه الكثير من الضوابط) فلا تغفلهم.
لن يصبح الاستثمار في شركة عظيمة استثماراً عظيما اذا كنت تدفع الكثير مقابل الحصول على سهمها, او كما اختصره جراهام في مفهوم " هامش الأمان" . وهو أحد المبادئ الحياتية الأكثر عبقرية.
الكتاب يحتاج فكرة مسبقة عن الاستثمار و البورصة لقراءته بدون صعوبة, فهو يصلح للمتخصصين أكثر و الشغوفين بالمعرفة .
سأترك فيديو توضيحي لفكرة الكتاب معروض بطريقة جيدة و ممتعة أيضاً.
https://www.youtube.com/watch?v=npoyc...
June 21, 2019
Intelligent Investor by many is considered to be the best book on value investing that you will ever read. The book is written by Benjamin Graham who was Warren Buffett’s lecturer at Columbia University. Warren Buffett, one of the greatest investors of all time, personally endorses it and says that this is, by far, the best book on investing. He says that stock is an ownership interest in a company and is something completely opposite to speculation, day trading or anything like that.
At the beginning of the book, Graham outlines what he terms as investing as opposed to speculation. Basically, investing is where you aim to preserve the capital and you thoroughly research the shares so that, within a certain extent, guarantee what kind of earnings you’re going to get from that investment. In other words, invest only if you would feel comfortable to hold the stock in the future without seeing the fluctuating prices. That’s the essence of value investing.
Nevertheless, what Graham really highlights, apart from research and a plethora of ratios you should be able to evaluate, is how the psychology and logic of the investor really matter and how to keep your emotions under control. He goes through different types of investors, starting from the defensive investor who is someone a lot more careful. It could be even called the passive investor because he invests and then leaves the wallet allowing it to grow. Next, we have the entrepreneurial investor who is someone willing to and has time to do a lot more research to look for undervalued companies that he can put their money in and watch it grow over time. He also argues that most people should be the defensive investor because the entrepreneurial investor approach does require a lot of time. Too much time for someone who also has a full-time job at the same time as being an investor.
Next, he talks a lot about asset allocation. Generally speaking, it is about diversification of your investments where 75% of your portfolio you should be in stocks as the market is rising and 25% of it in bonds or other fixed-income assets. Of course, 75% to 25% is just approximation. As the market hits its peak (or what you think might be the peak) you should start to sell off your shares and start aiming at bonds which then should represent 75% of your wallet. When the recession hits rock bottom you should repeat the circle and go back to shares. Graham also gives his advice on further diversifications of companies in your wallet, their size and ratios they should present.
Intelligent Investor is a pretty old book and was written 1949 so you could expect some dry and a bit old-fashion language. Nevertheless, it was updated several times and I would recommend the latest version as each chapter was enhanced by comments provided by Jason Zweig. This adds a lot of value because he goes through what Graham is talking about and applies that to modern times and companies. On the other hand, as the book...(if you like to read my full review please visit my blog https://leadersarereaders.blog/the-in...)
At the beginning of the book, Graham outlines what he terms as investing as opposed to speculation. Basically, investing is where you aim to preserve the capital and you thoroughly research the shares so that, within a certain extent, guarantee what kind of earnings you’re going to get from that investment. In other words, invest only if you would feel comfortable to hold the stock in the future without seeing the fluctuating prices. That’s the essence of value investing.
Nevertheless, what Graham really highlights, apart from research and a plethora of ratios you should be able to evaluate, is how the psychology and logic of the investor really matter and how to keep your emotions under control. He goes through different types of investors, starting from the defensive investor who is someone a lot more careful. It could be even called the passive investor because he invests and then leaves the wallet allowing it to grow. Next, we have the entrepreneurial investor who is someone willing to and has time to do a lot more research to look for undervalued companies that he can put their money in and watch it grow over time. He also argues that most people should be the defensive investor because the entrepreneurial investor approach does require a lot of time. Too much time for someone who also has a full-time job at the same time as being an investor.
Next, he talks a lot about asset allocation. Generally speaking, it is about diversification of your investments where 75% of your portfolio you should be in stocks as the market is rising and 25% of it in bonds or other fixed-income assets. Of course, 75% to 25% is just approximation. As the market hits its peak (or what you think might be the peak) you should start to sell off your shares and start aiming at bonds which then should represent 75% of your wallet. When the recession hits rock bottom you should repeat the circle and go back to shares. Graham also gives his advice on further diversifications of companies in your wallet, their size and ratios they should present.
Intelligent Investor is a pretty old book and was written 1949 so you could expect some dry and a bit old-fashion language. Nevertheless, it was updated several times and I would recommend the latest version as each chapter was enhanced by comments provided by Jason Zweig. This adds a lot of value because he goes through what Graham is talking about and applies that to modern times and companies. On the other hand, as the book...(if you like to read my full review please visit my blog https://leadersarereaders.blog/the-in...)
February 24, 2018
I saw that Benjamin Graham was Buffet's professor at Columbia and one of his closest friends. In fact Buffet named one of his kids after Graham. The Intelligent Investor teaches the philosophy that Buffet learned at school and went on to find massive success with. It does not teach people to ride market waves or speculate. Instead it instructs those who follow its teachings to calculate the intrinsic value of companies, find the ones that are either under priced or successful, but proven to have long term proven success capabilities, and then create a portfolio with those.
The defensive investor does this, then puts new money in every month and checks on the ratios of his/her portfolio ever quarter or six months to make sure its still balanced (hypothetically lets say 60% stocks 40% bonds) this reduces drifting and ensures long term revenue, even if it's not the absolute highest one can earn it's still consistent and positive.
Because their choices were made based on intrinsic value and not market prices, these companies are good long term investments and the investor doesnt have to sell and buy new ones constantly. It's also suggested to have companies spanning all sectors to reduce risk by diversifying.
The defensive investor does this, then puts new money in every month and checks on the ratios of his/her portfolio ever quarter or six months to make sure its still balanced (hypothetically lets say 60% stocks 40% bonds) this reduces drifting and ensures long term revenue, even if it's not the absolute highest one can earn it's still consistent and positive.
Because their choices were made based on intrinsic value and not market prices, these companies are good long term investments and the investor doesnt have to sell and buy new ones constantly. It's also suggested to have companies spanning all sectors to reduce risk by diversifying.
January 7, 2017
Warren Buffet calls out, "(this is) by far the best book on investing ever written."
……rest other testimonials are just reiterations.
------------
P.S. Not for traders.
P.P.S. Don't forget to read Jason Zweig's commentary after each chapter to get the current context. Most of the times, those help to understand the original text much better.
……rest other testimonials are just reiterations.
------------
P.S. Not for traders.
P.P.S. Don't forget to read Jason Zweig's commentary after each chapter to get the current context. Most of the times, those help to understand the original text much better.
July 10, 2009
Why I Read this Book: Warren Buffet became the successful man he is today greatly as a result of what he learned from the man who wrote this book. We have the chance to read exactly what he read.
Review:
Whether you are an avid investor with a complex understanding of the markets or a beginner who is yet to start learning, there is little doubt that you have heard of Warren Buffet. He represents a level of success that very few people ever reach. Most of us know Buffet as the second richest man in the world, but many of us do not stop to think that he has build his great fortune solely off of investing. He has not invented anything or built any specific business. He has gotten to where he is by nothing more than diligent value and principle based investing (with very little debt I might add).
I apologize for the long rant on Buffet especially since he only wrote the first few pages of this edition. The man behind this book’s genius is Benjamin Graham. It was many of his fundamentals and principles that got Buffet started with a foundation that soon grew to be insurmountable. The amazing thing is that anyone interested in these principles has the opportunity to buy a copy of this book for less than twenty dollars. It continues to blow me away; the amount of success-related knowledge that is available to us for the learning.
To be very honest up front, this is not the easiest read. It is written by a 20th century economist and quite frankly it often reads just like that. But to that note one should not pick this book up for humor and entertainment as much as he should to learn. Although there will be times when you will find yourself laughing or smiling at some of the stories told and how they ring true even today in our ever more sophisticated world. One such example is the concept of emotional investing, one of which most all of us have been guilty at one time or another. It is worth mentioning that for every bit of hard theory, this particular revised addition of the book has just about as much digestible commentary (courtesy of Jason Zweig) to help the reader through. This commentary is crucial to the level of satisfaction of the read.
I would not dare to get into the specifics of this book as I would not do them justice and I feel that the above should be more than enough reason to read the full edition. However I will comment on the over all tone of it. The book (as well as Buffet’s proven strategy) is based on a fundamental set of principles. These principles are something that, no matter what the circumstances, is never to be broken. This is how the rigor of an “intelligent investor” is maintained. I believe this to be the real difference between Graham and Buffet and the rest of the investment community (If you have not already, you should be sure to read Buffet’ s 13 principles on Berkshire’s website). Both these men display an inhumane level of disciple to stick to the very principles they have developed.
Having a principle-based investment strategy is something that will prove to be of much value as one progresses along his career (or hobby) of successful investing. If you are able to decide on a set of principles (be them your own or those of others) and stick to them at all costs, decisions suddenly become much more fluid and easy to make. How else do you think Buffet can make a $4 billon investment before lunch time?
The real reason I mention this is that it has a much greater underlying message. If principle based investing has proven so successful (provided your principles are sound of course) then imagine what can be accomplished in the overall success of ones life if you live by a firm set of principles and core values. This quickly becomes clear once you read through some of the top rated books in my personal development section. By now I hope you have already developed your set of core values by which to live. Now take advantage of this book to establish a similar set of values by which to judge personal investments. The added long term financial success will be explicit. Then again I guess you could just buy Berkshire, but perhaps you should make that decision for yourself after reading the book that helped create it.
-Reading For Your Success
Review:
Whether you are an avid investor with a complex understanding of the markets or a beginner who is yet to start learning, there is little doubt that you have heard of Warren Buffet. He represents a level of success that very few people ever reach. Most of us know Buffet as the second richest man in the world, but many of us do not stop to think that he has build his great fortune solely off of investing. He has not invented anything or built any specific business. He has gotten to where he is by nothing more than diligent value and principle based investing (with very little debt I might add).
I apologize for the long rant on Buffet especially since he only wrote the first few pages of this edition. The man behind this book’s genius is Benjamin Graham. It was many of his fundamentals and principles that got Buffet started with a foundation that soon grew to be insurmountable. The amazing thing is that anyone interested in these principles has the opportunity to buy a copy of this book for less than twenty dollars. It continues to blow me away; the amount of success-related knowledge that is available to us for the learning.
To be very honest up front, this is not the easiest read. It is written by a 20th century economist and quite frankly it often reads just like that. But to that note one should not pick this book up for humor and entertainment as much as he should to learn. Although there will be times when you will find yourself laughing or smiling at some of the stories told and how they ring true even today in our ever more sophisticated world. One such example is the concept of emotional investing, one of which most all of us have been guilty at one time or another. It is worth mentioning that for every bit of hard theory, this particular revised addition of the book has just about as much digestible commentary (courtesy of Jason Zweig) to help the reader through. This commentary is crucial to the level of satisfaction of the read.
I would not dare to get into the specifics of this book as I would not do them justice and I feel that the above should be more than enough reason to read the full edition. However I will comment on the over all tone of it. The book (as well as Buffet’s proven strategy) is based on a fundamental set of principles. These principles are something that, no matter what the circumstances, is never to be broken. This is how the rigor of an “intelligent investor” is maintained. I believe this to be the real difference between Graham and Buffet and the rest of the investment community (If you have not already, you should be sure to read Buffet’ s 13 principles on Berkshire’s website). Both these men display an inhumane level of disciple to stick to the very principles they have developed.
Having a principle-based investment strategy is something that will prove to be of much value as one progresses along his career (or hobby) of successful investing. If you are able to decide on a set of principles (be them your own or those of others) and stick to them at all costs, decisions suddenly become much more fluid and easy to make. How else do you think Buffet can make a $4 billon investment before lunch time?
The real reason I mention this is that it has a much greater underlying message. If principle based investing has proven so successful (provided your principles are sound of course) then imagine what can be accomplished in the overall success of ones life if you live by a firm set of principles and core values. This quickly becomes clear once you read through some of the top rated books in my personal development section. By now I hope you have already developed your set of core values by which to live. Now take advantage of this book to establish a similar set of values by which to judge personal investments. The added long term financial success will be explicit. Then again I guess you could just buy Berkshire, but perhaps you should make that decision for yourself after reading the book that helped create it.
-Reading For Your Success
November 8, 2014
This is an amazing book. I read it when I was 13 and what I've learned has stuck in my head ever since. It changed my whole way of thinking about the stock market and investing in general.
May 28, 2021
This book is so long and so dry it's taken me foreverrrrrr to get through it... I put it down so many times and forced myself to open it back up. The delivery is just so f'n borin lol and also it's so old and some of it isn't even relevant anymore.
There are some great things to learn in this book but I feel it's a bit one sided and not very worldly if you will. Really looks at one side of the coin instead of showing everything and letting you decide. This is something I also didn't really like in the book.
Maybe it's because I had such high expectations of this book because it's literally on everyone's bookshelf lol but I'm going to give my book to charity and hopefully it strikes a chord with someone else.
lol I just checked and I didn't even take any notes on this book XD
Instead of reading this book just go watch YouTube summaries on it and you're good.
There are some great things to learn in this book but I feel it's a bit one sided and not very worldly if you will. Really looks at one side of the coin instead of showing everything and letting you decide. This is something I also didn't really like in the book.
Maybe it's because I had such high expectations of this book because it's literally on everyone's bookshelf lol but I'm going to give my book to charity and hopefully it strikes a chord with someone else.
lol I just checked and I didn't even take any notes on this book XD
Instead of reading this book just go watch YouTube summaries on it and you're good.
May 11, 2020
To say that this book is a heavy piece of work is like saying, obesity is not a problem in the US. No wonder Republicans don't talk about this piece of education enough.
It took me two months to read this book. At the end of this book, I ended up having a portfolio of an exigent value that was proofed through every piece of advice around the valuing of a stock. It just so happened that I was finishing this book before making any purchases as the stock market was collapsing due to the covid19 situation. Oh time, you unlovable beloved.
I think it would be impossible to write a review of this book. It's not just a book, it's an entire masters education course of personal financial management, without the jargons. However, if I were to oversimplify the hell outta it, here you go -
- Investment is NOT speculation. Anyone who says otherwise knows not his/her shit. Investment comes from a state of knowledge, not guesswork. However, one should know how much he/she doesn't know. Be socratic about this.
- Buying a stock should be treated as buying a piece of land. You don't want to see the value of the price of your land everyday. Instead you just hope that its price increases in a significant term of time. because of its location, foundations, floor area, number of bodies than can be hidden in the attic, garden access to Narnia, etc. The same goes for stocks. So uninstall those stock tracking apps now.
- Your investment portfolio can be built of primarily two things when it comes to security holdings - stocks and bonds. It's necessary to maintain a healthy ratio between the two. A 100% stock portfolio is overtly optimistic. A 100% bond portfolio is overtly pessimistic. As the Buddha said while smoking his third joint, follow the Middle Path i.e not more than 75% stock, not less than 25% bonds.
- The key to making money out of securities is in understanding the true value of a company, not checking what the stock price is. How you compute the true value of a company is a science, not an art. The key concept here is “Margin of Safety”. Buy stocks that are clearly underpriced in the market. Look for “no brainer opportunities”, so even if your calculations were a little bit off or specific assumptions about future prospects don’t materialise, you’re still likely to earn a profit. These opportunities are hard to find, but worth waiting for. These stocks especially become much more conspicuous in a bear market. And congratulations, we are now in the early phases of a bear market :)
- Inflation is the most misunderstood blow to any portfolio. Account for it. Learn that every government tries to maintain a certain level of inflation (surprise surprise!!!). The longer you want to draw benefit from your portfolio, the more you need to account for inflation.
- You truly don't need to have more than 10 securities (bonds and stocks together) to build value. Instead of looking for new stocks every day, just put money into the stocks you have valued and analysed properly at the start of every month when you get your salary. It's called dollar cost averaging. If you are reevaluating your portfolio for more than once in six months, you are doing something wrong.
- You can't time the market. YOU SIMPLY CAN'T. So if you feel that a stock has the right value, just buy it. And then forget about it.
- Building value for yourself isn't a competition. As a person with a job, you can't possibly hope to beat people who are professional security analysts. So don't even try to. Instead, focus on increasing the value of your own portfolio.
- (My own interpretation from the book looking at the current market) Buy an index fund that follows the S&P 500 that follows the market is a pretty safe beginning. This will ensure that if the market makes money, you make money. Moreover, most of these index funds are pretty diverse in their make up, which will surely add some cushioning if you are risk-averse.
My biggest learning from this book is the psychological aspect that is needed to be able to use this book. Graham states that an intelligent investor is one with a uniquely balanced temperament to not get influenced by external influences as and when they come up. Wall Street talks a lot. You really don't need to listen to it all the time.
I might have oversimplified a lot of things from what I learnt from the book. To get a much deeper understanding, I would highly recommend you read this book.
**Something I should add - The interpretations here are my own from reading the book. If you end up losing money by taking these advices at face value, you can't legally sue me. There I said it. Phew.
It took me two months to read this book. At the end of this book, I ended up having a portfolio of an exigent value that was proofed through every piece of advice around the valuing of a stock. It just so happened that I was finishing this book before making any purchases as the stock market was collapsing due to the covid19 situation. Oh time, you unlovable beloved.
I think it would be impossible to write a review of this book. It's not just a book, it's an entire masters education course of personal financial management, without the jargons. However, if I were to oversimplify the hell outta it, here you go -
- Investment is NOT speculation. Anyone who says otherwise knows not his/her shit. Investment comes from a state of knowledge, not guesswork. However, one should know how much he/she doesn't know. Be socratic about this.
- Buying a stock should be treated as buying a piece of land. You don't want to see the value of the price of your land everyday. Instead you just hope that its price increases in a significant term of time. because of its location, foundations, floor area, number of bodies than can be hidden in the attic, garden access to Narnia, etc. The same goes for stocks. So uninstall those stock tracking apps now.
- Your investment portfolio can be built of primarily two things when it comes to security holdings - stocks and bonds. It's necessary to maintain a healthy ratio between the two. A 100% stock portfolio is overtly optimistic. A 100% bond portfolio is overtly pessimistic. As the Buddha said while smoking his third joint, follow the Middle Path i.e not more than 75% stock, not less than 25% bonds.
- The key to making money out of securities is in understanding the true value of a company, not checking what the stock price is. How you compute the true value of a company is a science, not an art. The key concept here is “Margin of Safety”. Buy stocks that are clearly underpriced in the market. Look for “no brainer opportunities”, so even if your calculations were a little bit off or specific assumptions about future prospects don’t materialise, you’re still likely to earn a profit. These opportunities are hard to find, but worth waiting for. These stocks especially become much more conspicuous in a bear market. And congratulations, we are now in the early phases of a bear market :)
- Inflation is the most misunderstood blow to any portfolio. Account for it. Learn that every government tries to maintain a certain level of inflation (surprise surprise!!!). The longer you want to draw benefit from your portfolio, the more you need to account for inflation.
- You truly don't need to have more than 10 securities (bonds and stocks together) to build value. Instead of looking for new stocks every day, just put money into the stocks you have valued and analysed properly at the start of every month when you get your salary. It's called dollar cost averaging. If you are reevaluating your portfolio for more than once in six months, you are doing something wrong.
- You can't time the market. YOU SIMPLY CAN'T. So if you feel that a stock has the right value, just buy it. And then forget about it.
- Building value for yourself isn't a competition. As a person with a job, you can't possibly hope to beat people who are professional security analysts. So don't even try to. Instead, focus on increasing the value of your own portfolio.
- (My own interpretation from the book looking at the current market) Buy an index fund that follows the S&P 500 that follows the market is a pretty safe beginning. This will ensure that if the market makes money, you make money. Moreover, most of these index funds are pretty diverse in their make up, which will surely add some cushioning if you are risk-averse.
My biggest learning from this book is the psychological aspect that is needed to be able to use this book. Graham states that an intelligent investor is one with a uniquely balanced temperament to not get influenced by external influences as and when they come up. Wall Street talks a lot. You really don't need to listen to it all the time.
I might have oversimplified a lot of things from what I learnt from the book. To get a much deeper understanding, I would highly recommend you read this book.
**Something I should add - The interpretations here are my own from reading the book. If you end up losing money by taking these advices at face value, you can't legally sue me. There I said it. Phew.
August 19, 2014
Wow ... This book is amazing. It is definitely a must read for investors in stock markets. It is not only a "book", it is a "reference".
The book shows enormous efforts from GRAHAM; the author, through the editions of this book.
The comments by ZWEIG are extremely beneficial and was up to the standard of the original text using updated info and statistics beyond GRAHAM's times. The piece written by BUFFET at the end of the book is such a wonderful one and - nearly - summarizes the whole idea of the book.
I will unquestionably read this book again and will always keep it on my desk (or at least in a place where I can reach easily). The index at the end of the book is extremely useful for looking up specific topics that were mentioned in the book.
Buffet said chapter 8 and 20 are the most important chapters of the book, and they are. But if I want to add other chapters for people who are interested solely in common stocks, I would recommend reading - in addition - chapters: 4-7, 11-12, 14-15.
Finally, I want to thank B.GRAHAM, the author. And W.BUFFET, the author's unique follower and one of the most - or shall I say the most - successful stock investor ever. J.ZWEIG, who - in my opinion - was up to the challenge of bringing the original text to present and to summarize and simplify each chapter by his valuable comments. And finally, HARPER COLLINS, the publisher; for their neat job publishing this book.
The book shows enormous efforts from GRAHAM; the author, through the editions of this book.
The comments by ZWEIG are extremely beneficial and was up to the standard of the original text using updated info and statistics beyond GRAHAM's times. The piece written by BUFFET at the end of the book is such a wonderful one and - nearly - summarizes the whole idea of the book.
I will unquestionably read this book again and will always keep it on my desk (or at least in a place where I can reach easily). The index at the end of the book is extremely useful for looking up specific topics that were mentioned in the book.
Buffet said chapter 8 and 20 are the most important chapters of the book, and they are. But if I want to add other chapters for people who are interested solely in common stocks, I would recommend reading - in addition - chapters: 4-7, 11-12, 14-15.
Finally, I want to thank B.GRAHAM, the author. And W.BUFFET, the author's unique follower and one of the most - or shall I say the most - successful stock investor ever. J.ZWEIG, who - in my opinion - was up to the challenge of bringing the original text to present and to summarize and simplify each chapter by his valuable comments. And finally, HARPER COLLINS, the publisher; for their neat job publishing this book.
January 29, 2021
The main value of this book for me was it's age. The original book was published in 1949, after the shocks of Great Depression and WWII, revised in the 1970s after the energy crisis and had a commentary from Jason Zweig from early 2000s reflecting on the dot-com crash.
And for those feeling that what's going on in the stock market today is completely exceptional - read this book - in some shape or form, it's all happened before.
The book laid out a pretty good case for "value investing" and tried to demonstrate basic analysis of company financials to determine the value of their stock. The analysis part made me realise that the time, effort and financial skill required to successfully do quality analysis for the stock value for hundreds of companies is probably beyond the time and attention that I can commit.
It meshes nicely with Jack Bogle's book about index funds on many of the basic points: it's very difficult to "beat the market", but reasonably possible to get the same returns as the market, costs (and losses) cumulate as well as gains, do not get carried away with the buy-sell frenzy and short-term emotions and sentiments on the market.
The specific tips and tricks felt a bit outdated - a lot of space was committed for specific types of bonds (US railroads, etc), very little about index funds and ETF-s.
I loved one GoodReads user's review this book _"1 star. This book sucks! I read it all I learned was that I should not invest into any of the popular stocks in the market today"_ Well, duh!
And for those feeling that what's going on in the stock market today is completely exceptional - read this book - in some shape or form, it's all happened before.
The book laid out a pretty good case for "value investing" and tried to demonstrate basic analysis of company financials to determine the value of their stock. The analysis part made me realise that the time, effort and financial skill required to successfully do quality analysis for the stock value for hundreds of companies is probably beyond the time and attention that I can commit.
It meshes nicely with Jack Bogle's book about index funds on many of the basic points: it's very difficult to "beat the market", but reasonably possible to get the same returns as the market, costs (and losses) cumulate as well as gains, do not get carried away with the buy-sell frenzy and short-term emotions and sentiments on the market.
The specific tips and tricks felt a bit outdated - a lot of space was committed for specific types of bonds (US railroads, etc), very little about index funds and ETF-s.
I loved one GoodReads user's review this book _"1 star. This book sucks! I read it all I learned was that I should not invest into any of the popular stocks in the market today"_ Well, duh!
September 3, 2008
The classic book on investing by the man who taught Warren Buffett. Originally written 50 years ago, and it is still relevant. The same lessons applied to specific industries and companies at the time of the writing have obvious parallels to different industries and companies today.
And there are some radical ideas, despite it's age, that fly in the face of "conventional wisdom". The most important example in my opinion was the idea of how much risk you should have in your investments:
The "risk" you take on, in terms of volatility and uncertainty, should not depend on how close you are to retirement, but rather how much time you can spend on researching your investments. If you don't want to spend time, take safe investments, like index funds mutual funds, and blue chip stocks that pay regular dividends. If you are willing to do research, and keep current, it makes sense to invest less diversely and include higher risk stocks.
And there are some radical ideas, despite it's age, that fly in the face of "conventional wisdom". The most important example in my opinion was the idea of how much risk you should have in your investments:
The "risk" you take on, in terms of volatility and uncertainty, should not depend on how close you are to retirement, but rather how much time you can spend on researching your investments. If you don't want to spend time, take safe investments, like index funds mutual funds, and blue chip stocks that pay regular dividends. If you are willing to do research, and keep current, it makes sense to invest less diversely and include higher risk stocks.
April 4, 2010
The value investors Bible.
If value investing had a holy book of scripture, this would be it! Not only was Ben Graham's timeless investment advice unassailable, but the commentary's after each chapter by Jason Zweig were current and refreshing.
While I learned and re-learned many truths with this book, some of the most valuable ideas were to distinguish between "investing" and "speculation." Graham asserts that most of what is called investing today would be more accurately named speculation. Also his insistence on a "margin of safety" is timeless truth. Always insist on a large enough margin between price paid and value of an enterprise (and it's stock) so that if things go wrong, you won't lose your principle.
Graham is truly a modern prophet calling all speculators to a higher level of investing. Funny that the wisdom here is framed in investing language but, it's applicability reaches into just about every part of our lives if we'll open up to it.
If value investing had a holy book of scripture, this would be it! Not only was Ben Graham's timeless investment advice unassailable, but the commentary's after each chapter by Jason Zweig were current and refreshing.
While I learned and re-learned many truths with this book, some of the most valuable ideas were to distinguish between "investing" and "speculation." Graham asserts that most of what is called investing today would be more accurately named speculation. Also his insistence on a "margin of safety" is timeless truth. Always insist on a large enough margin between price paid and value of an enterprise (and it's stock) so that if things go wrong, you won't lose your principle.
Graham is truly a modern prophet calling all speculators to a higher level of investing. Funny that the wisdom here is framed in investing language but, it's applicability reaches into just about every part of our lives if we'll open up to it.
January 23, 2013
I'd read several books about Benjamin Graham as well as articles by him in the past, but this was my first foray into reading a book authored by him. It's definitely a great primer into the world of value investing and not only outlines its tenets but also their rationale. Several historical examples are used to illustrate his points.
One criticism: for all the words spent on intrinic value, no clear cut way is proposed for its calculation, however. Several proxies (i.e. book value, fair value, etc) are used, but here investing begins to become an art.
One criticism: for all the words spent on intrinic value, no clear cut way is proposed for its calculation, however. Several proxies (i.e. book value, fair value, etc) are used, but here investing begins to become an art.
June 24, 2018
Rating: 4.0/5.0
I have decided to pick up this classic and read it because I read that Warren Buffett calls it the bible of an investor. The book is filled with information and case studies. The original edition covers the stock markets and cases up to the year 1970, however, I have read the fourth edition which has an updated commentary by Jason Zweig.
I am not sure I can call this the bible of investing but all I can say that there are tons of useful information about stock market here. The author Benjamin Graham has successfully covered most of the issues and points any investor should keep in mind before investing such as the difference between investment and speculation, the effect of inflation on the market and the stocks, the difference between portfolio allocations of the defensive investor and the enterprising investor, how an investor should feel about market fluctuations etc.
There is everything in this book for everyone. If you are new to investing or if you are a professional. Yes, sometimes the writing style seems to be more complex in certain subjects but the updated commentary after each chapter was a big help to clear any doubt or question.
I have decided to pick up this classic and read it because I read that Warren Buffett calls it the bible of an investor. The book is filled with information and case studies. The original edition covers the stock markets and cases up to the year 1970, however, I have read the fourth edition which has an updated commentary by Jason Zweig.
I am not sure I can call this the bible of investing but all I can say that there are tons of useful information about stock market here. The author Benjamin Graham has successfully covered most of the issues and points any investor should keep in mind before investing such as the difference between investment and speculation, the effect of inflation on the market and the stocks, the difference between portfolio allocations of the defensive investor and the enterprising investor, how an investor should feel about market fluctuations etc.
There is everything in this book for everyone. If you are new to investing or if you are a professional. Yes, sometimes the writing style seems to be more complex in certain subjects but the updated commentary after each chapter was a big help to clear any doubt or question.
March 23, 2014
This is a book that offers down-to-earth, practical advice on investing to a layman audience. Graham's message can be summarized in the last sentence, "to achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks."
In particular, Graham introduces the following concepts:
1. Value Investing. Before selecting a stock, understand the company, protect yourself against serious losses, and aspire to "adequate" not extraordinary performance.
2. Protect yourself against inflation by purchasing TIPS. Never predict stock's future return by extrapolating from the past solely. Strive to be cautious.
3. Investing is as much a number's game as it is a mind's game. In his words, it is more about "character" than intelligence.
This book is packed with wisdom not only for investing but also for life. The advice Graham dispenses advising individuals to be grounded by solid fundamentals and to guard against animal spirits are valid for other life's adventures. This book should be in everyone's toolkit.
In particular, Graham introduces the following concepts:
1. Value Investing. Before selecting a stock, understand the company, protect yourself against serious losses, and aspire to "adequate" not extraordinary performance.
2. Protect yourself against inflation by purchasing TIPS. Never predict stock's future return by extrapolating from the past solely. Strive to be cautious.
3. Investing is as much a number's game as it is a mind's game. In his words, it is more about "character" than intelligence.
This book is packed with wisdom not only for investing but also for life. The advice Graham dispenses advising individuals to be grounded by solid fundamentals and to guard against animal spirits are valid for other life's adventures. This book should be in everyone's toolkit.
September 11, 2022
اصول راهنمای سرمایهگذاری هوشمندانه
فصل اول: کسبوکاری که در آن سرمایهگذاری میکنید را به خوبی بشناسید
فصل دوم: بدانید چه کسی کسبوکار را اداره میکند
آیا مدیریت واقعا کارآمد است؟
آیا متوسط سودی که سهامداران بیرونی دریافت میکنند با انتظارات آنها متناسب است؟
فصل سوم: برای کسب درآمد در بلندمدت سرمایهگذاری کنید و خرید و فروشهای سریع انجام ندهید
فصل چهارم: به عقلانیت خود اعتماد داشته باشید
فصل پنجم: سرمایهگذاریها را با توجه به ارزش ذاتیشان انتخاب کنید، نه براساس محبوبیتشان
فصل ششم: همیشه با یک حاشیهی امن سرمایهگذاری کنید
فصل اول: کسبوکاری که در آن سرمایهگذاری میکنید را به خوبی بشناسید
فصل دوم: بدانید چه کسی کسبوکار را اداره میکند
آیا مدیریت واقعا کارآمد است؟
آیا متوسط سودی که سهامداران بیرونی دریافت میکنند با انتظارات آنها متناسب است؟
فصل سوم: برای کسب درآمد در بلندمدت سرمایهگذاری کنید و خرید و فروشهای سریع انجام ندهید
فصل چهارم: به عقلانیت خود اعتماد داشته باشید
فصل پنجم: سرمایهگذاریها را با توجه به ارزش ذاتیشان انتخاب کنید، نه براساس محبوبیتشان
فصل ششم: همیشه با یک حاشیهی امن سرمایهگذاری کنید
April 24, 2010
The central Idea that I got from this book is that an Index Stock Fund outperforms other equity funds on a historical basis. And sometimes it outperforms active investing too. And from my wife’s portfolio of 5 years, it seems to be true.
The other Idea is the emotional Mr. Market. The stock market as a speculative investment is a zero-sum game, and Mr. Market plays the role of the crazy trader who trades stocks at a different price everyday. Of course, the book encourages investing for the long term where the stock value grows along with the economy. But for active investors, it is recommended that they study Mr. Market’s price variations and invest in their preferred stock at their lowest price.
Investment here is also specifically mentioned to be different from trading or speculating. Some may call it ‘Fundamental’ investing and what it means is just that one must study the company’s fundamentals (financials/management) before selecting it for investment. Normally the investment would be long term and the only time to sell is if the company’s direction or management does not fit with investor’s requirements anymore.
Lastly, the book introduces the concept of Margin of Safety. Of course, the writer puts this concept in context of the Great Depression of the 1930s. The idea is that even if a stock looks cheap on paper, you still can get screwed by the irrational Mr. Market who prices it lower and lower. So a stock that looks borderline cheap is not good enough. Ben Graham recommends to have a bigger Margin of Safety and buy it really cheap. It will help with the sleeping soundly at night too. It is the result of living through the Great Depression and it is a lowering of one’s risk to the point where the returns will be quite limited too.
For a basic course in investing, one cannot go wrong with this book, BUT for normal readers, the writing style might be a bit archaic. It IS written quite a long time ago. For those who have read this book, they will have the basics to invest but in order to get a better return, they must next read Common Stocks and Uncommon Profits.
The other Idea is the emotional Mr. Market. The stock market as a speculative investment is a zero-sum game, and Mr. Market plays the role of the crazy trader who trades stocks at a different price everyday. Of course, the book encourages investing for the long term where the stock value grows along with the economy. But for active investors, it is recommended that they study Mr. Market’s price variations and invest in their preferred stock at their lowest price.
Investment here is also specifically mentioned to be different from trading or speculating. Some may call it ‘Fundamental’ investing and what it means is just that one must study the company’s fundamentals (financials/management) before selecting it for investment. Normally the investment would be long term and the only time to sell is if the company’s direction or management does not fit with investor’s requirements anymore.
Lastly, the book introduces the concept of Margin of Safety. Of course, the writer puts this concept in context of the Great Depression of the 1930s. The idea is that even if a stock looks cheap on paper, you still can get screwed by the irrational Mr. Market who prices it lower and lower. So a stock that looks borderline cheap is not good enough. Ben Graham recommends to have a bigger Margin of Safety and buy it really cheap. It will help with the sleeping soundly at night too. It is the result of living through the Great Depression and it is a lowering of one’s risk to the point where the returns will be quite limited too.
For a basic course in investing, one cannot go wrong with this book, BUT for normal readers, the writing style might be a bit archaic. It IS written quite a long time ago. For those who have read this book, they will have the basics to invest but in order to get a better return, they must next read Common Stocks and Uncommon Profits.
June 16, 2021
I don't get the cult behind this book. I can't think of any other reason that this book is considered a bible of value investing strategies other than its constantly advertised endorsement by Warren Buffet. The one thing I've now ascertained with reliable efficacy is that taking any advice from conventional lists on popular books to the purpose of understanding the investing mindset is a doomed effort. The books are almost always horrible and this one is particularly efficient in providing evidence towards that fact.
The original authorial intent seems to intentionally be as obtuse as possible about the most basic of matters. The original text feels very much like a preliminary written draft and the supplementary texts by the coauthor were preferably relevant in both their form and content. Not to mention the irrelevant verbiage and the constant barrage of prescriptive instructions instead of any deeper exploration of the underlying mechanics of the behavior of markets and the authors thought process to navigate through it. It's the equivalent of a cook book manual to a food science book.
Bumped it by a point for its historical relevance as the first formalization of value investing principles - but its outdated instructions and examples, its tiring and verbose style that might rival the proclivities of mathematicians like Gauss in making their papers as incomprehensible as possible as a matter of intellectual display, and the sheer page length make this a nightmare that's just a flex for people with bookshelves. There's nothing here that isn't summarized in the first introductory page of Investopedia's guide to value investing.
The original authorial intent seems to intentionally be as obtuse as possible about the most basic of matters. The original text feels very much like a preliminary written draft and the supplementary texts by the coauthor were preferably relevant in both their form and content. Not to mention the irrelevant verbiage and the constant barrage of prescriptive instructions instead of any deeper exploration of the underlying mechanics of the behavior of markets and the authors thought process to navigate through it. It's the equivalent of a cook book manual to a food science book.
Bumped it by a point for its historical relevance as the first formalization of value investing principles - but its outdated instructions and examples, its tiring and verbose style that might rival the proclivities of mathematicians like Gauss in making their papers as incomprehensible as possible as a matter of intellectual display, and the sheer page length make this a nightmare that's just a flex for people with bookshelves. There's nothing here that isn't summarized in the first introductory page of Investopedia's guide to value investing.
September 22, 2020
I would give it a 3.5 out of 5 stars.
As the fact that I left this book in the middle few month ago, and now picked it and finished the remaining portion of the book, so it was that I didn't enjoy the book, it was a bit boring, maybe I started this book without having any prior knowledge on the investing and stock market, but I would say that was the main reason that I wanted to read this book, to get myself familiar with the world of investing and stocks. Except few information, I don't find anything relevant in the book for the layperson in stock markets, this maybe a book well suited for someone who already has the basic know how of stock market. I would come up with complete review after rereading the book in future.
As the fact that I left this book in the middle few month ago, and now picked it and finished the remaining portion of the book, so it was that I didn't enjoy the book, it was a bit boring, maybe I started this book without having any prior knowledge on the investing and stock market, but I would say that was the main reason that I wanted to read this book, to get myself familiar with the world of investing and stocks. Except few information, I don't find anything relevant in the book for the layperson in stock markets, this maybe a book well suited for someone who already has the basic know how of stock market. I would come up with complete review after rereading the book in future.
August 23, 2019
کتاب ارزشمندیه تو حوزه سرمایه گذاری ولی ترجمه به شدت خرابه. پیشنهاد میکنم نسخه ی اصلی رو بخونین.
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