This lockdown, if you are looking for a good read on investing, to guide you through stock markets, warn you about the pitfalls and advise you against problems you might come across – then “The Intelligent Investor” by “Benjamin Graham” is the book for you.
“The Intelligent Investor” written by the greatest investment advisers of the twentieth century – Benjamin Graham – is by far one of the best books on investing. Vital and indispensable – this book details Graham's timeless wisdom about investing. This book is so significant that Warren Buffett himself wrote a preface for it.
“The Intelligent Investor” has many valuable concepts and is a must-read for all the stock market investors. In this masterpiece, Benjamin Graham explains the principles of value investing and how, as an intelligent investor, you can stay ahead of the markets. Easy to read and understand this book offers a treasure trove of financial wisdom. Moreover, it is a guide to help a normal investor mature into an intelligent investor.
The first half of the book is dedicated to the general concepts of the market. Whereas the second half of the book describes the methods to analyze stocks using ratios, balance sheets, cash flow, etc. It further explains the various approaches of defensive and enterprising investors, along with chapters on management, dividend policy, and case studies.
Key Take-aways From “The Intelligent Investor:”
- Analyze investments for the long term, protect yourself from losses, and don’t go for crazy profits
- Choose investments for their fundamental value, not their popularity
- Know the business you are investing in
- Know who runs the business
- Never trust ‘Mr. Market,’ he can be very irrational in the short and medium-term
- Ensure you follow a strict investment formula, and you’ll do fine
- Have confidence in your own analysis and observations.
Here are Some Great Quotes from the Book:
- “The whole point of investing is not to earn more money than average, but to earn enough money to meet your own needs.”
- “No matter how careful you are, the one risk no investor can ever eliminate is the risk of being wrong.”
- “Successful investing is about managing risk, not avoiding it.”
- “People who invest make money for themselves; people who speculate make money for their brokers.”
- “The stock investor is neither right or wrong because others agreed or disagreed with him; he is right because his facts and analysis are right.”
- “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
- “To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework.”
- “You must deliberately protect yourself against serious losses.”
- “You will be much more in control if you realize how much you are not in control.”
- “Never mingle your speculative and investment operations in the same account, nor in any part of your thinking.”
The “Intelligent Investor” is labeled as the stock market bible ever since it was published. Millions of investors all around the world follow this masterpiece diligently. It shields investors from substantial error and teaches them to develop long-term strategies.
In short, in your spare time this lockdown, this book is a must-read if you want to build up your investment portfolio. It will not only help you walk the path of the intelligent investor but will also help you reach your financial goals easily.