Start your review of The Intelligent Investor Write a review Shelves: wealth-management Benjamin Grahams 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 , this version that I read was re-published in with a forward written by John Bogle who started Vangard Mutual Fund. Bogles 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.
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By Emily Norris Updated Jan 31, While physicist Sir Isaac Newton is widely viewed as the leading authority on gravity and motion, economist Benjamin Graham is lauded as a top guru of finance and investment. Known as "the father of value investing ," Graham excelled at making money in the stock market without taking big risks, by evaluating companies with surgical precision.
His principles of investing safely and successfully continue to influence investors today. Sadly, Graham lost most of his money in the stock market crash of and the subsequent Great Depression. These ideals inspired him to write "Security Analysis" published in , which chronicled his methods of analyzing securities.
Graham referred to this imaginary person as "Mr. Market," who sometimes proposed prices that made sense, and who at other times proposed prices that were off the mark, given current economic realities. As investors, we have the power to accept or reject Mr. This allows for profit on the upside, as the market typically eventually recalibrates the stock to its fair value , while simultaneously offering downside protection in the event that a business falters or permanently shutters its doors.
Legendary investor Warren Buffett, who Graham famously mentored, called this title "by far the best book on investing ever written. He later worked for Graham at his investment company, the Graham-Newman Corporation. Graham was also instrumental in drafting elements of the Securities Act of , legislation requiring companies to provide financial statements certified by independent accountants. Article Sources Investopedia requires writers to use primary sources to support their work.
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After the death of his father and experiencing poverty, he became a good student, graduating as salutatorian of his class at Columbia. He declined an offer to teach English, mathematics, and philosophy, choosing instead to take a job on Wall Street , where he eventually started his Graham-Newman Partnership. It read, "An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative. With that perspective in mind, the stock owner should not be too concerned with erratic fluctuations in stock prices, since in the short term the stock market behaves like a voting machine, but in the long term it acts like a weighing machine i. Graham distinguished between the passive and the active investor. The passive investor, often referred to as a defensive investor, invests cautiously, looks for value stocks, and buys for the long term.
The Intelligent Investor