The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition)

Congratulations! If you are thinking of buying this book, chances are that you are serious about the investing. If you are very new to investing then this book is not for you just yet. I would recommend you to read the books that warn you about the risks of stock picks and about the efficient market theory. You must enter in stock market with utmost caution and suspicion because ease of investment has somehow watered down the understanding of the risk involved in the stock market.

This book is written by the dean of value investment field. Now a days almost all money managers call themselves value investors but after reading this book you would be able to separate the wheat from the chaff. Many people have criticized the book to be archaic but they are probably the same people who heralded the dot com bubble as the dawn of the "new era". The book is timeless and is as relevant today as it was in the past. Of course the book does not tell you about the fancy investment vehicles such as options and futures but what it tells you is the most important lesson in business not just in investing. It is the lesson of discipline and value. Ben Graham has shared his observation over several decades in the book. He goes on to show the cyclical nature of the economy and then demonstrates that disciplined approach to value investing with enough margin of safety is the only way of making money in stock market. It is easier said than done because with the intention of following the "buying low and selling high", most people end up doing exact the opposite. This is why Mr Graham said "The worst enemy of an investor is well, himself". This is where the discipline comes into the picture. Mr Graham goes on to show the consequences of not following the discipline. On a personal note, I have faced the consequences of not following the discipline.
In the end I would say if you have read this book once, you should read it once every year.

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If you want to consistently make money, this is the book to read. Amazing book.

The Intelligent Investor is a great book when taken in context: It's a classic text of value investing with a few key ideas that translate well over time despite the passing of the years. The context is important, as Graham founded his ideas before most of the theories of efficient capital markets were developed, and was heavily influenced by the great depression.

The book draws the distinction between three types of investors: The conservative investor (should only buy goverment debt, and not a target of the book), the speculative investor (also not a target of the book) and the enterprising, or intelligent investor, whom the book covers.

There were three key takeaways from this book:
1) The concept of Mr. Market as a manic depressive counterparty. Sometimes he loves a stock, sometimes he hates it. As the investor, you can wait for when he comes to you.

2) The importance of a margin of safety. Initially this is viewed in terms of assets (a company with more net assets than market cap) though the margin of safety can also be competitive. (It's worth noting that points 1 & 2 are the key points highlighted by Warren Buffett, Graham's most famous student)

3) The level of risk someone is willing to take should be dependent on their ability to research and understand their investments. This runs against the grain of passive portfolio theory, but is indespensible to an individual stock picker.

Despite these points, the book is a product of two times. The original writings by Graham are filled with many accounting and analytical techniques better suited for a prior era. The book is more about principles. Additionally, there's a disproportionate emphasis on Jason Zweig's (very useful) chapter-by-chapter analysis on modern internet duds.

All that said, this book rightfully belongs on every value investor or afficianado's bookshelf, and the updates by Mr. Zweig are a worthwhile addition to bring the book into the modern era.

I was drawn to this book first because W. Buffet suggested it. Secondly, I was draw to this book because it was first written in the '20's or '30's and has continued to have a strong following ever since. With today's fad investment books lasting a few weeks or may a couple years before their flaws are exposed this appeared different.

I can say that this book was different. If you compare this to say Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money--That the Poor and Middle Class Do Not! OR Rich Dad's Guide to Investing: What the Rich Invest in, That the Poor and the Middle Class Do Not!, you will see actual information being provided rather than general concepts. You will also see that the author has enough information to fill out the pages of the book rather than repeating every fourth sentence just to make it to the end.

I read this book through and had to significant take aways for myself.

First, I am not an investor in the sense demanded by this author and demonstrated by W. Buffet. I just simply do not have the wherewithal to travel to companies that I intend to invest in.

Second, I now understand why so many people suggest diversification as an investment strategy. They are doing so because it is the first step to time-averaged investing. They just do not explain the second step to that strategy which is balance. This book lays this out and it is the first time I have seen this investment strategy throughly explained. So, now that I understand the point, I have made changes to my portfolio to balance my investments and keep them balanced. This method is so much easier than what I was previously doing and is very likely to produce the same results for me as I am not an investor of the order of W. Buffet.

I got a book of financial advice from many CEOs of famous companies and many of them cited this book. The edition I got has a modern commentary with examples from recent events (2003.) This book is generally geared to Value Investing for the long term. Warren Buffet orginally read this book in 1955 and used it as a tool to build Berkshire Hathaway.