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The Intelligent Investor
Benjamin Graham
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What is The Intelligent Investor about?
Benjamin Graham's bible of value investing, the book Warren Buffett calls the best ever written on the subject. Learn the difference between investing and speculating, why Mr. Market is your servant rather than your guide, and how a margin of safety protects you from your own mistakes. Timeless principles for building wealth without losing sleep.
Key ideas of The Intelligent Investor
Investing vs. Speculating
An investment requires thorough analysis and a promise of safety, while anything less is speculation, a distinction most people ignore at great cost.
Mr. Market as Your Servant
Treat daily price quotes as an offer you can accept or ignore, never as a verdict on the actual value of your holdings.
Margin of Safety
Buying a business for meaningfully less than it is worth creates a cushion that absorbs errors, bad luck, and irrational market pessimism.
Read an excerpt from the summary
The Intelligent Investor
Author: Benjamin Graham (1949, revised 1973). Updated commentary by Jason Zweig (2003). Preface by Warren E. Buffett.
Opening
In 1929, Benjamin Graham was thirty-five years old and running one of the most respected investment partnerships on Wall Street. His clients were rich. He was richer. Then the market crashed, and crashed again in 1930, and again in 1931. By the bottom, his partnership had lost about seventy percent of its capital. The man who would later be called the father of value investing had personally watched a decade of compounding evaporate inside thirty-six months.
Most people who lose that much never come back. Graham came back. He spent the next two years rebuilding the partnership without taking a salary, made his investors whole by 1935, and then went on to compound their money at roughly twenty percent a year for the next two decades. Along the way he wrote two books. The first, Security Analysis, became the textbook of the profession. The second, the one you are about to read, is the only investment book he wrote for ordinary people. He called it The Intelligent Investor. Warren Buffett, who took Graham's class at Columbia in 1950 and went to work for him five years later, has called it "by far the best book about investing ever written."
The reason it has survived seventy-five years while almost every other investment book is forgotten is simple. Graham did not try to predict the market. He tried to teach you how to behave when the market behaves badly. Stocks crash. Manias come and go. Hot industries turn cold. None of that has changed since 1949 and none of it is going to change. What Graham gives you is the temperament to survive all of it without panicking, without chasing, and without doing anything stupid with the money you have managed to save.
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Continue in the appWho is it for?
- Anyone who wants a principled framework for investing rather than tips or predictions.
- Anyone who has panicked during a market downturn and sold at the wrong time.
- Anyone building long-term wealth on a steady income without time to follow markets daily.
- Anyone who confuses a rising stock price with a good investment and wants a better test.
About the author: Benjamin Graham
Benjamin Graham (1894-1976) was an economist and professional investor who taught at Columbia Business School for nearly three decades. After rebuilding his investment partnership from a seventy-percent loss during the Great Depression, he compounded returns at roughly twenty percent annually for two decades. He is widely regarded as the father of value investing.
His most famous student, Warren Buffett, has called The Intelligent Investor the best investment book ever written and credited Graham with giving him the intellectual framework and emotional discipline to invest well. Two other Graham students, Walter Schloss and Bill Ruane, went on to decades-long records that beat the market by wide margins.
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