Benjamin Graham is widely regarded as the “Father of Value Investing.” Security Analysis (1934) and The Intelligent Investor (1936) were two of the seminal works in neoclassical investing (1949). Graham studied at Columbia University before beginning his career on Wall Street. He subsequently established the Graham-Newman firm and hired Warren Buffet. Warren Buffet profited immensely from Graham’s methods and supplied the preface to this book. Graham’s investment theory was always centered on investor psychology, debt minimization, buy-and-hold investing, concentrated diversification, and purchasing within the margin of safety.
The Intelligent Investor is a book that tries to assist readers in investing in the stock market while avoiding economic risks. It emphasizes longer-term, risk-averse techniques. Graham prioritizes investments (based on study) over guesses (based on predictions). The Intelligent Investor shows how to begin value investing and how to avoid allowing Mr. Market to dictate your financial decisions.
Graham went to work on Wall Street after graduating from Columbia University in 1914. He was able to build a significant personal nest fund throughout his 15-year career. Unfortunately, Graham, like many others, lost the majority of his money during the 1929 stock market crash and following Great Depression.
Graham learned a valuable lesson about avoiding downside risk by investing in firms whose shares traded significantly below their liquidation value. In other words, he wanted to acquire a dollar’s worth of assets for $0.50. To do this, he employed market psychology, capitalizing on market worries. These beliefs motivated him to create Security Analysis, which he co-wrote with David Dodd and published in 1934. Both writers were professors at Columbia University’s business school when they wrote the book in the early 1930s. Graham’s methodologies for assessing securities are detailed in the book.
Lessons you will learn from this Book
- The History of the Stock Market
- The Issue of Inflation
- Stocks can’t reliable overcome Inflation
- REITs can overcome Inflation
- Don’t let age Influence your Investing
- Defensive Investing
- Enterprise Investing
- How to Invest in Stocks
- Adopt an Evidence-Based Approach to Investing
- You Can Make a Lot of Money By Profiting From Market Volatility
- Be Careful About Using Financial Advisors
- Security Analysis
- The Margin of Safety
Final Review
The Intelligent Investor is concerned with making sound investment decisions based on data. Understanding your financial situation and aspirations allows you to make sound financial decisions. Investing in index funds and REITs is a viable option for some. Financial advisers are the key to financial success for others. However, selecting the appropriate financial advisor is also critical. Each financial choice must be supported by proof.
The Intelligent Investor E-Book Download (by Benjamin Graham)