The Intelligent Investor
by Benjamin Graham
The Intelligent Investor argues that sound investing means buying a business below what it is worth and holding on through the market's mood swings, protected by a margin of safety and immune to Mr. Market's daily quotes.
What it teaches
Graham draws a sharp line between investing and speculating: the investor buys ownership in a business at a price supported by its underlying value, while the speculator bets on price movements. Two ideas do the heavy lifting. The margin of safety insists you pay well below your estimate of worth, so ordinary errors and bad luck do not sink you. Mr. Market—Graham's parable of a manic-depressive partner offering prices that swing between euphoria and despair—teaches you to exploit his moods rather than be governed by them, because a stock's quoted price and its business value are separate things. The book distinguishes defensive from enterprising investors and warns that temperament, not intelligence, decides outcomes. It is a discipline for anyone who wants durable results without predicting markets. Warren Buffett, Graham's student, calls it the best book on investing ever written.
The ideas this book explains
Read the idea in two minutes, then read the book behind it.
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