Long-term Strategies for Investors inside The Intelligent Investor

Did you know The Classic Text Annotated to Update Graham's Timeless Wisdom for Today's Market? Conditions The greatest investment advisor of the twentieth century, Benjamin Graham taught and inspired people worldwide.

Graham's philosophy of "value investing" -- which shields investors from substantial error and teaches them to develop long-term strategies -- has made The Intelligent Investor the stock market bible ever since its original publication in 1949. Over the years, market developments have proven the wisdom of Graham's strategies.

While preserving the integrity of Graham's original text, this revised edition includes updated commentary by noted financial journalist Jason Zweig, whose perspective incorporates the realities of today's market, draws parallels between Graham's examples and today's financial headlines, and gives readers a more thorough understanding of how to apply Graham's principles. Vital and indispensable, this HarperBusiness Essentials edition of The Intelligent Investor is the most important book you will ever read on how to reach your financial goals.

The Intelligent Investor is a great book when taken in context: It's a classic text of value investing with a few key ideas that translate well over time despite the passing of the years. The context is important, as Graham founded his ideas before most of the theories of efficient capital markets were developed, and was heavily influenced by the great depression. The book draws the distinction between three types of investors: The conservative investor, the speculative investor  and the enterprising, or intelligent investor, whom the book covers.

Benjamin Graham is known as the Father of Value Investing and was the mentor of Warren Buffett, the most successful investor of all time. Warren Buffett called the Intelligent Investor `the best book about investing ever written.' He believed in defensive, value investing, and famously summarized his philosphy as follows: "An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative."

When you download or buy The Intelligent Investor Revised Edition by Benjamin Graham, he begins by laying out the foundational definition of investment versus speculation. "An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative." In the following chapters, Graham gives his readers unprecedented access to the stock market history and grants readers the wisdom that are used in developing portfolio policies in the body of the book. Graham's book attempts to inject some transparency into the secret world of finance and he has succeeded abundantly.

According to Graham, almost everybody, does investing wrong. You are supposed to buy low and sell high, but most folks buy when the price is going up and sell when it is coming down. Market is very emotional and encourages stampedes toward whatever looks good at the moment, and away from investments that seem spent. This very act of buying and selling creates updrafts and downdrafts in the market which causes disparity between what the price is and what the price should be for a given investment. Eventually the true value of an investment comes to fore when things settle down. The maxim he uses for this is: the market is a voting machine in the short run and a weighing machine in the long run. The investors `vote' for an investment which drives the price up; later, the investors find out what the investment is really worth, and the price settles into it's real value. He cited convincing examples in the tech-bubble era of the late 90's where stock prices ascended to ridiculously high levels and then came crashing down to almost nothing, and their stock shares became like Confederate money, worth only slightly more than the paper they were printed on.

Benjamin Graham has laid down a solid, entirely fundamentals-driven argument for why value is the most sound approach to making stock selection/investment decisions. Its written clearly, its concise and its sound fundamental advice makes the work timeless. Mr. Graham does an excellent job of laying out great examples to convince you that value investing and dollar cost averaging is the only right way to invest. He further details the methods to pick a company and determine its intrinsic value. The book also has a number of case studies, allowing the reader to see real world application of Mr. Grahams concepts, though some of the commentary is distracting.

Hope the book will help you to know yourself, help you to identify opportunities, and most importantly help you do identify possible follies. It is definitely not a get rich quick book, at least not in any tangible way, but the wisdom that is passed on through the pages is perhaps more valuable than a number on paper ever could be.