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- Investment vs Speculation. Benjamin Graham starts off the book by defining the difference between investing and speculation. He comments that there are three goals when choosing an an investment
- Determine What Type of Investor You Are. The Intelligent Investor categorizes the types of investors in two ways: The Active/Enterprising Investor & The Passive/Defensive Investor.
- Inflation. Why invest in the first place? According to Benjamin Graham, protecting against inflation is one major reason to invest. Inflation happens when the dollar loses value or purchasing power.
- Fundamental Analysis. Throughout The Intelligent Investor, emphasis is placed on the importance of using fundamental analysis to choose your investments.
- The Intelligent Investor’S Beginnings
- What You Can Learn from The Intelligent Investor
- The Intelligent Investor and Warren Buffett
- The Bottom Line
After graduating from Columbia University in 1914, Graham went to work on Wall Street. During his 15-year career, he was able to cultivate a sizable personal nest egg. Unfortunately, Graham, like many others, lost most of his money in the stock market crash of 1929and the subsequent Great Depression. Those experiences taught Graham lessons about mi...
Graham, along with David Dodd, began teaching value investing as an investment approach at Columbia Business School in 1928. In 1949, Graham and Dodd published The Intelligent Investor. Here are some of the key concepts from the book.
About The Intelligent Investor, legendary investor Warren Buffett, who Graham famously mentored, described it as "by far the best book on investing ever written.” In fact, after reading it at age 19, Buffett enrolled in Columbia Business Schoolin order to study under Graham, with whom he developed a lifelong friendship. He later worked for Graham a...
Although details of Graham's specific investments aren’t readily available, he reportedly averaged an approximate 20% annual return over his many years managing money. His method of buying low-risk stocks with high return potential has made him a true pioneer in the financial analysis space, and many other successful value investorshave his methodo...
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- Investment versus Speculation: Results to Be Expected by the Intelligent Investor. Graham gives examples of what constitutes speculation and investment in the stock market.
- The Investor and Inflation. Again, Graham uses very specific historical numbers and data to discuss rates of inflation and their effect on investment performance, the relative merits of investing in stocks vs bonds when keeping inflation in mind, and so on.
- A Century of Stock-Market History: The Level of Stock Prices in Early 1972. This chapter is almost completely historical. Graham compares stock prices, earnings and dividends for the preceding 100 years using ten year averages.
- General Portfolio Policy: The Defensive Investor. Graham first alludes to his central maxim of how returns are not proportional to risk. Graham then discusses allocation in stocks vs bonds.
- Getting Started in Investing. Successful investing is a journey, not a one-time event, and you'll need to prepare yourself as if you were going on a long trip.
- Know What Works in the Market. Read books or take an investment course that deals with modern financial ideas. The people who came up with theories such as portfolio optimization, diversification, and market efficiency received their Nobel prizes for good reason.
- Know Your Investment Strategy. Nobody knows you and your situation better than you do. Therefore, you may be the most qualified person to do your own investing—all you need is a bit of help.
- Know Your Friends and Enemies. Beware of false friends who only pretend to be on your side, such as certain unscrupulous investment professionals whose interests may conflict with yours.
Generally speaking, there are 2 strategies to choose from when you become an intelligent investor, you can be a defensive investor or an enterprising investor, the one you pick should be based on your personality and how much you love or fear risk.
Mar 21, 2024 · Graham analyzes approaches for the enterprising buyer, including what forms of opportunities to prevent, such as for example speculative shares and brand-new dilemmas.
The Intelligent Investor is a classic investing book by Benjamin Graham, mentor to billionaire investor Warren Buffett. Here's a chapter-by-chapter review.
