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The Intelligent Investor

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updated 19 Jan 2023

"The Intelligent Investor" is a book written by Benjamin Graham, first published in 1949. It is considered a classic in the field of investment and is widely regarded as one of the most important books on value investing.

The book provides a comprehensive overview of the principles of investment and is aimed at the lay investor, as opposed to the more in depth book by Graham Security Analysis. It covers topics such as stock and bond valuation, portfolio management, and the psychology of investing.

Key Points

  1. Value investing: Graham advocates for a value-oriented approach to investing, where investors should focus on the intrinsic value of a company, rather than its stock price. He emphasizes the importance of thorough research and due diligence when making investment decisions.

  2. Margin of Safety: Graham stresses the importance of having a margin of safety in investment, meaning that investors should only invest in companies that are undervalued by the market and have a safety net in case things go wrong.

  3. Diversification: Graham advocates for diversification in the investment portfolio, arguing that investors should spread their investments across different companies and industries to reduce risk.

  4. Long-term investment horizon: Graham emphasizes the importance of having a long-term investment horizon and avoiding the temptation to try to time the market.

  5. The role of the investor: Graham argues that the role of the investor is to be rational and objective, not to be swayed by emotions or market fluctuations. He encourages investors to adopt a disciplined and systematic approach to investing.

  6. The importance of understanding the business: Graham stresses the importance of understanding the underlying business and its financials before making an investment. He encourages investors to focus on the long-term prospects of a business and not to be swayed by short-term market fluctuations.

Overall, "The Intelligent Investor" is considered a seminal work in the field of Value Investing.

Other Resources

The Intelligent Investor Summed up in 12 minutes