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The Intelligent Investor by Benjamin Graham

posted onAugust 12, 2017

If you could only read one investment book in your lifetime, this would probably be the one. Billionaire investor, Warren Buffett describes The Intelligent Investor as the best book on investing that he has ever read. Written by Benjamin Graham (1894 –1976), one of the greatest investment advisors of the twentieth century, the book is considered the stock market bible and ever since its original publication in 1949, it has inspired millions of people worldwide on how to reach their financial goals.

Benjamin Graham, is widely known as the "father of value investing," a philosophy which shields investors from substantial error and teaches them to develop long-term strategies. Over the years, market developments have proven the wisdom of his strategies. Graham, whose first book, Security Analysis, was published in 1934, in The Intelligent Investor details six key principles of “intelligent investing”:

Benjamin Graham

1. Know the business you’re investing in. 2. Know who runs the business. 3. Invest for profits over time, not for quick buy-and-sell transaction profits. 4. Choose investments for their fundamental value, not their popularity. 5. Always invest with a margin of safety. 6. Have confidence in your own analysis and observations.

The book covers topics such as portfolio policy, asset allocation, inflation, diversification, market fluctuation, dividends, margin of safety and is divided in twenty chapters:

Chapter 1: Investment versus Speculation: Results to Be Expected by the Intelligent Investor Chapter 2: The Investor and Inflation Chapter 3: A Century of Stock-Market History: The Level of Stock Prices in Early 1972 Chapter 4: General Portfolio Policy: The Defensive Investor Chapter 5: The Defensive Investor and Common Stocks Chapter 6: Portfolio Policy for the Enterprising Investor: Negative Approach Chapter 7: Portfolio Policy for the Enterprising Investor: The Positive Side Chapter 8: The Investor and Market Fluctuations Chapter 9: Investing in Investment Funds Chapter 10: The Investor and His Advisors Chapter 11: Security Analysis for the Lay Investor: General Approach Chapter 12: Things to Consider about Per-Share Earnings Chapter 13: A Comparison of Four Listed Companies Chapter 14: Stock Selection for the Defensive Investor Chapter 15: Stock Selection for the Enterprising Investor Chapter 16: Convertible Issues and Warrants Chapter 17: Four Extremely Instructive Case Histories Chapter 18: A Comparison of Eight Pairs of Companies Chapter 19: Shareholders and Managements: Dividend Policy Chapter 20: “Margin of Safety” as the Central Concept of Investment

The Intelligent Investor is one of the most influential books you will ever read and offers key lessons that every investor really needs to know in order to be successful. Just keep in mind "Before you invest, you must ensure that you have realistically assessed your probability of being right and how you will react to the consequences of being wrong" and "Without a saving faith in the future, no one would ever invest at all. To be an investor, you must be a believer in a better tomorrow." 

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