Book Review: The Intelligent Investor by Benjamin Graham
“The Intelligent Investor” by Benjamin Graham is widely considered a classic in the field of investment. First published in 1949, the book has stood the test of time and remains a must-read for any serious investor. The book provides a comprehensive guide to value investing and is filled with practical advice and insights that are still relevant today.
The book is divided into four parts: the “nature of the stock market,” “general portfolio policy,” “the defensive investor,” and “the enterprising investor.” In the first part, Graham provides an overview of the stock market and the various types of investors that participate in it. He emphasizes the importance of understanding the difference between speculation and investment, and the dangers of trying to time the market.
In the second part, Graham discusses general portfolio policy and the importance of diversification in investing. He also provides an in-depth analysis of the concept of margin of safety, which is a key principle of value investing. The margin of safety is the difference between the intrinsic value of a security and its market price. By purchasing securities at a significant discount to their intrinsic value, investors can reduce the risk of loss.
The third part of the book is devoted to the defensive investor, who is someone who is primarily interested in preserving their capital. Graham provides a detailed analysis of the characteristics of a defensive investor and the types of securities that are suitable for them. He also provides a list of criteria that can be used to screen for undervalued securities, which is a valuable tool for any investor.
The final part of the book is aimed at the enterprising investor, who is someone who is interested in actively managing their portfolio and taking on more risk in pursuit of higher returns. Graham provides an overview of the different types of enterprising investors and the types of securities that are suitable for them. He also provides an in-depth analysis of the concept of net current asset value, which is a key principle of value investing.
Throughout the book, Graham provides a wealth of practical advice and insights that are still relevant today. He emphasizes the importance of patience and discipline in investing and the dangers of trying to time the market. He also provides a detailed analysis of the concept of intrinsic value, which is a key principle of value investing. By understanding the intrinsic value of a security, investors can identify undervalued securities and reduce the risk of loss.
According to the most successful investor and the chairman & CEO of Berkshire Hathaway Mr. Warren Buffet, this the best book on investing ever written.
By far the best book on investing ever written.
One of the strengths of the book is that it provides a balanced perspective on investing. Graham does not advocate for any one particular investment strategy but instead provides a comprehensive overview of the different types of investors and the types of securities that are suitable for them. This makes the book accessible to a wide range of investors, from the most conservative to the most aggressive.
Another strength of the book is that it is written in a clear and concise manner, making it easy to understand even for readers who may not have a background in finance or economics. The book is also filled with real-world examples and case studies, which help to illustrate the concepts discussed in the book.
In conclusion, “The Intelligent Investor” by Benjamin Graham is a must-read for any serious investor. The book provides a comprehensive guide to value investing and is filled with practical advice and insights that are still relevant today. The book’s balanced perspective, clear and concise writing, and real-world examples make it accessible to a wide range of investors. It is a timeless classic that will continue to be read for decades to come.
Book purchase URLs: You can buy the book from the following URL:
Amazon Japan: The Intelligent Investor
Amazon USA: The Intelligent Investor
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