In it’s time, I’m sure “The Intelligent Investor” was a blockbuster success, written by one of the foremost investment geniuses of all time. I’m also sure that most of the investment fundamentals outlined in the book still apply IN THEORY, but the book is so outdated, despite revisions, that it was of no use to me. Most of the examples, charts, graphs and illustrations were limited to industrial, brick & mortar businesses of the 60’s and 70’s. It’s an entirely different world and investment mindset today. The “defensive investment” financial guidelines listed in chapter 14 were, in this day and time, completely unrealistic. Try finding a handful of stocks with a price to book ratio of less than 1.5, or companies with a recommended current ratio (current assets / current liabilities) of at least 2:1. Today, most companies with financial statistics like these are not growing AT ALL. Furthermore, the book is not up-to-date enough to guide the investor through the dizzying array of valuable online stock screening/research websites that are available. The book is so outdated, the Internet is barely, if at all, even mentioned in the book, much less covered as the ultimate stock research tool of all time. I’m now retired, and I wish I had read this book in 1972 when I graduated from college, but it was of no use to me today. Sorry !
I am sure this book is chalk full of good info! However it is certainly not a beginners book to investing. If you’re like me and have no idea what the definition of terms like “net tangible assets”, and “sub working capital” are it may be best to find a true beginners book as a prequel to this one. Lots of good info I cant yet understand.
Edition: I found commentary very useful (though often distracting). If you are not a professional – you’ll appreciate the commentaries and epilogue – read it first? It’s very inspiring.Book: “You either get the idea in the first five minutes, or you don’t get it at all”, commented Warren Buffet in the epilogue. I would add – you don’t necessarily need to read all 550 pages, but you must read through the idea of value investing – and it will change your way of looking at the world. I always felt confused and amazed by listening to all the ridiculous fuzz that comes from the Wall Street through TV and the internet. The book explains why.Several rules of thumbs I noted into my keep:- Investor buys the business [based on its price/value], speculator buys the stock [based on an absurd believe that he can foresee where the stock price will go].- The best way to earn adequate return without any trouble whatsoever is to invest into cheap (low maintenance cost) indexes; use dollar averaging (buy every month instead of once at a random point of time) for smoothing the luck involved.- For enterprising investor (willing to spend much more time), look for a diversified list of bargain issues (at least 30 issues, business values (i.e. net current asset and other related metrics) is below market cap)- During the bubble, hot industries and companies are getting overpriced. That could only be financed from somewhere. Partially that money are coming from well established old economy companies that lose the appeal. Thus, invest in such old economy companies while bubble grows, as soon as the bubble burst – undervalued companies would rise back.- Don’t ever buy IPOs! (See chapter for compelling arguments)- Don’t consider companies that do not pay dividends. Dividends – money firm pays you for providing capital, they belong to you. They cut a piece for reinvestment – payout ratio. If firm doesn’t pay dividends – invest all into growth so you could profit later – that’s a speculation. Moreover stock price would be more volatile because it should now rely on future rather than current prospects.- When gambling – bet on a single chip to maximize the payoff (roulette $1 to $35 payoff at 1/37 chance). When investing – diversify: each investment must have a margin of safety, the more diversified portfolio – the less likely that all will fail. You are a roulette house now who earns with each turn of the wheel.
So far into my career, this book has un-ironically been one the greatest investments I have made so far.This is a great book for anyone who is interested in introducing themselves into the world of investing, or wants to hone their skills and better themselves. Although, while a great book I would not recommend it to anyone who doesn’t have the discipline to treat this book as a college textbook. Annotate, take notes, and create a guide. If you want to start taking investing seriously and want to begin practicing the discipline of self education, this is the book for you.Best of luck to everybody.
This probably is one of the greatest investing books ever written, but it suffers from two flaws: 1) like all such books, it could be condensed into about 20 pages. The supporting evidence could be put in an appendix for those who want to see it. 2) it is very dated. I was 13 when Graham published his last edition, and I just can’t get excited reading something that talks about 1970 like it was last year. The commentary by Zweig, widely criticized, is actually the saving grace. His writing style is more current and he brings things up-to-date, sort of, but even his commentary misses the Great Recession. This would all be much better if it could be taken out of its temporal context and summarized more generally. Charts that make a point using data from decades ago is okay, but the body of the book is so immersed in old dates that it just feels, well, out of date!
*Edition: I found commentary very useful (though often distracting). If you are not a professional – you’ll appreciate the commentaries and epilogue – read it first? It’s very inspiring.*Book: “You either get the idea in the first five minutes, or you don’t get it at all”, said Warren Buffet in the epilogue.- I would add – you don’t necessarily need to read all 550 pages, but you must read through the idea of value investing – and it will change your way of looking at the world.- I always felt confused and amazed by listening to all the ridiculous fuzz that comes from the Wall Street through TV and the internet. The book explains why.🔴Several rules I noted into my keep: ፨ – Investor buys the business [based on its price/value], speculator buys the stock [based on an absurd believe that he can foresee where the stock price will go]. ፨ – The best way to earn adequate return without any trouble whatsoever is to invest into cheap (low maintenance cost) indexes; use dollar averaging (buy every month instead of once at a random point of time) for smoothing the luck involved. ፨ – For enterprising investor (willing to spend much more time), look for a diversified list of bargain issues (at least 30 issues, business values (i.e. net current asset and other related metrics) is below market cap) ፨ – During the bubble, hot industries and companies are getting overpriced. That could only be financed from somewhere. Partially that money are coming from well established old economy companies that lose the appeal. Thus, invest in such old economy companies while bubble grows, as soon as the bubble burst – undervalued companies would rise back. ፨ – Don’t ever buy IPOs! (See chapter for compelling arguments) ፨ – Don’t consider companies that do not pay dividends. Dividends – money firm pays you for providing capital, they belong to you. They cut a piece for reinvestment – payout ratio. If firm doesn’t pay dividends – invest all into growth so you could profit later – that’s a speculation. Moreover stock price would be more volatile because it should now rely on future rather than current prospects.The Intelligent Investor, by Benjamin Graham, is probably the most important and influential value investing book ever written even Warren Buffet described it as “by far the best book ever written on investing”. ፨ If you could only buy one investment book in your lifetime, this would probably be the one. ፨ It had been 6 months since I last read The Intelligent Investor. I have enjoyed my personal “refresher course” in value investing.🔴Objective of The Intelligent Investor Book ፨ Benjamin Graham’s objective was to provide an investment policy book for the ordinary investor. ፨ He succeeded in putting seemingly hard concepts into terms that could be understood and, more importantly, implemented by the average investor. ፨ The typical investor has a tendency to “follow the market” when they should be employing portfolio risk management strategies. Instead, Graham gives us an alternative based on fundamental stock analysis. ፨ The goal is to learn how to avoid the pitfalls of allowing our emotions to control our investment decisions. Rather, Graham provides the foundation for making businesslike decisions.🔴The Intelligent Investor puts special emphasis on teaching:1. Risk management through asset allocation and diversification.2. Maximizing probabilities through valuations analysis and margin of safety.3. A disciplined approach that will prevent consequential errors to a portfolio.🔴If you have any Doubt regarding this Review or this Product, then Feel Free to Contact me or Just ask me by commenting below.I Hope this Review was Helpful.Write reviews, help others, happy shopping.Thank You for Reading this Review.-●➽ʙʜᴀᴠᴇsʜ ʙ.ᴏ.ᴛ 🔥
This book is perhaps the most important and insightful book on investing, and an eternal classic. It is not a book that promises ‘How to become rich…’ or ‘Mastering Stock market in a week….’ or ‘Beating the market made easy…’ or any shortcut to a quick buck. The book teaches three powerful lessons of how one can:- minimize the odds of suffering irreversible losses- maximize the chance of achieving sustainable gains- practice emotional control and behavior to help the investor achieve full potential.The book is about investing and having said that, investing is for the long term. Short term investing is like saying one is a spendthrift miser. While long term investors buy stocks or bonds for its intrinsic value and hold them, the ‘short termers’ play on its price like a video game, high on dopamine, ‘seeing price patterns’. While the intrinsic value of the security is stable, the markets, built upon the greed and fear of speculators, fluctuate widely and it is this constant flow of price movements that is the juice of speculation.The intelligent investor is the one who estimates the value of a stock based on some key parameters like the company’s long-term prospects, quality of management, financial strength and capital structure, dividend record, and current dividend.Graham lists two types of intelligent investors. The ‘active’ or ‘enterprising’ who does continuous researching, selecting and monitoring a dynamic mix of stocks, bonds and mutual funds. The ‘passive’ or ‘defensive’ investor on the other hand, creates a permanent portfolio that runs on autopilot and requires no further effort (but generates very little excitement) argues the author so elegantly. Quoting the investment thinker Charles Ellis, ‘’the enterprising approach is physically and intellectually taxing, while the defensive approach is emotionally demanding’’.For the long-term defensive investor, who has abundant emotional courage not to be distracted by daily price movements, there is no need to look at the daily price. In fact, the investor ‘’would be better off if his stocks had no market quotation at all, for he would be spared the mental anguish caused by other persons’ mistakes of judgement.’’ We don’t check the price of our house every hour! The intelligent investor would make use of any opportunity if a good company is facing a temporary crisis and add more shares to his portfolio at lower price. (In cases of extreme exuberance, it is also wise to sell if the price seems too high to be real). A prudent investment methodology would be to add on more of high quality stocks on a regular basis, thus paving way for ‘dollar cost averaging’. A well-diversified stock and bond portfolio ensures long term risk mitigation.Though the book is highly acclaimed in investment circles, in practice, only a miniscule of market participants adhere to the key principles the world over. Hence, situations like the Dot com bubble, the financial crisis of the last decade and the collapse of high priced so called ‘high growth stocks’ of unworthy and nefarious companies happen repeatedly.‘’A man is known by the books he reads” said Ralph Waldo Emerson. Invest in companies that have proven track record, stellar management capabilities and high ethical standards of corporate citizenry. Being an intelligent investor is more a matter of ‘character’ than ‘brain’, is the key message of this great tome.
Little hard to understand for beginners. Otherwise this book is a jewel of investing.Printing, font size, paper quality all of this book is very good.
Very boring and you’ll have to fight your way through every page, but it’s a finance book so what do you expect? I wanted to learn more about investing after covering some basics in Rich Dad, Poor Dad, and this book did just that, but the basic message for me was play it safe and go for a good mutual fund, made me realise how complicated and scary investing is and made sure that I will never have the patience or enough interest to do my own investing. Please read this before starting your investing journey I’m sure it will save you some money and stress in the future whether is scares or inspires you.
In the midst of sharp rises of cryptocurrency, booming stock market, it was difficult for me, as a 28-year-old, to sit down and read an “old” book like this one. FOMO occurred daily, but I kept reading without giving in to act to the market “just because things are going up”. If Security Analysis by Mr. Graham is the science of investment, then the Intelligent Investor would be the art of investment.I made the first attempt to read this book 2 years ago but had failed. At that time, I knew little about the stock market, the economy, how businesses work. Much of the text made no sense to me and I had eventually given up after 4 chapters. However, after getting educated by the good folks on YouTube, I was able to give this book another try. Granted, it was still very challenging, but the value that I received from it was far greater than the literary hardship I endured.This is not a book that will get your blood to boil with excitement; it does not have tactics that offer promises of “do this and get rich”. If you are here for that reason, this is not the book for you. It however, guides you to approach the art of investment with the right attitude to stock prices, fluctuations, portfolio and risk. This book provides the readers immense investment experience with an attempt to shape an aspiring investor like myself with a proper mindset.Mr. Zweig’s commentary after each chapter are mostly helpful. There are instances that I had finished a chapter without getting much of it. The commentary then explains what Mr. Graham really meant in an easy-to-understand way. However, I did find the comparisons of different companies in one of the commentaries to be quite repeated. Most of the examples from the commentary were drawn from the dot com bubble and therefore the comparisons had rather predictable endings. Though it is still valuable to witness second hand at how bad things became when it burst.On the literary side, the language employed was slightly historical. Many sentences required me to re-read in order to understand. I think this is a good way to practise patience, as information is so easily accessible in today’s world. I also got to learn a few new words from the text.There are a lot of online commentaries on this book, as it has become almost “biblical” in value investing. I recommend the readers to use these commentaries to get a modern view of Mr. Graham’s concepts.