Book Review Intelligent Investor

"SOMEONE IS SITTING IN THE SHADE TODAY IS BECAUSE SOMEONE PLANTED A TREE LONG TIME AGO."                                                                                                                                                            -Warren Buffet

⭐⭐⭐⭐⭐

                                                                

GENRE Classic, Finance

AUTHOR Benjamin Graham

PAGES 635

YEAR OF PUBLISH 1949

BOOKS IN ROW  Security Analysis

RELATED BOOKS Four Pillars of Investing, The new Buffetology, Stocks for long Run.

About the Author

Benjamin Graham was not only one of the best investors who ever lived; he was also the greatest practical investment thinker of all time. Before Graham, money managers behaved much like a medieval guild, guided largely by superstition, guesswork, & arcane rituals. He became a master at researching stocks at microscopic, almost molecular detail. Despite a harrowing loss of nearly 70% during the Great Depression of 1929-1932, Graham survived and thrived in its aftermath.

Summary of Intelligent Investor

Sometimes disciples accomplish more than masters. Ramakrishna Paramhans to Swami Vivekananda, Ip Man to Bruce Lee, and so on. Benjamin Graham to Warren Buffet is one such story. Intelligent Investor, by Benjamin Graham, is a guide to fundaments on value investing. Marketed by Buffet as "The best book ever written on investing".

Each chapter contains profound wisdom which has stood the test of time. Full of metaphoric quotes and a critical case study from the American Stock Market, DJIA(Dow Johns Industrial Average).

The book starts with differentiating Investors and speculators, which he defines as opposite to one another. 

 A common approach includes a fundamental analysis of companies for investment, strategizing moves to protect, minimize losses, and focussing on small moves rather than expecting huge profits. The concept of defensive & enterprising investors, the only categories in this sector, and the game plan for them is discussed step by step. 

 

Further, it talks about how the stock market is behaving with respect to inflation( claimed to be 80% ahead of inflation). Graham said the best defense against inflation is in real estate and treasury bonds. Coming to the history of the stock market, it gave the answer to why people fail here. He said, people predict the future by analyzing the past, which acts as a mirage. Then the book reaches to complete chapters on Defensive Investors strategies & Principles of Portfolio policy for Enterprising Investor. Writing is like spoon feed tactics for both kinds of investors. It also touched upon the security analysis to estimate the value of a given stock which can then be compared with the current price to determine whether or not the security is an attractive purchase.

Book Review Intelligent Investor

I was told "Intelligent Investor" is the key to where the story of the stock market became logical from luck. Certainly, it stood on that bet. 

The struggle to comprehend classics still continued, but the 4th edition(which I read), was a great help as after every chapter a concluding chapter was added. It made things quite easy.

Further examples from, an existing enterprise like amazon.com helped to relate the theories written way long back. I think even someone who is completely new to investment could get webbed in  the text, so a word of advice "clear it by googling it." Readers will encounter an ample amount of data tables & graphs, fun to read. Writing is such that, readers may feel the writer is taking your class in investment.

One of my gifts is to relate things, mostly in funny aspects. During my read of it felt like an investment in the stock market is almost similar to playing ludo, where the chances of your winning maximize as you tend to minimize the risk of getting out. If you intelligently calculate your options to move with the random outcome of dice then every opportunity will bring you near to victory. Just the thing is that in the stock market is that the scope of randomness increases exponentially in comparison to dice with just six outcomes.

 

 

 

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