The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel...

The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised ... | Benjamin Graham, Jason Zweig | Time to think seriously...

books:

The Intelligent In...

	The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised ... Benjamin Graham, Jason Zweig Collins Business, 2003 - 640 pages average customer review:based on 127 reviews view larger image
	for more information click here

highly recommended

More than one million hardcovers sold
Now available for the first time in paperback!

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.

for more information click here

I should have read this book before investing

Simple like that: if you are a layman investor and don't want to lose a dime, stop your investment actions right now and start reading this book immediately.

I've started composing my stock portfolio a couple of months, before reading this book. At that time, I didn't know any of the Graham's wise lessons and took many decisions, some Graham-complying ones and some not. After six months, all bets on companies in a strong financial position, with a dividend payment history of more than 20 years, offering shares with a discount as consequence of the market fluctuation, and so on, proved to be right, even during crisis time.

A must read book for anyone aspiring to be a fraction of what a true investor is.

for more information click here

Time to think seriously...

Whether you are an investor or speculator, this book provides more detailed information than any book I have read. To get the most from this book, one must be willing to devote time to absorb what the author is writing about. As it is a rather large book, it is easy to put aside; however if one is serious about the "market" the vital information is available in this book. I firmly believe if one will read and understand this information, your financial program will benefit. Sam Harris

Best Investment Book I've Ever Read

The Intelligent Investor has helped me focus on the long term, to really internalize what sort of returns I should expect from my stock and bond investments and to temper my enthusiasm when the market gets exciting. Graham writes clearly, uses examples that are easily understood, and makes his points in an understated style. Though a bit dated -- Ben Graham met his greater reward more than thirty years ago and Jason Zweig focuses his commentary on the internet bubble and its aftermath -- the lessons set forth remain critical to value investing today. Just buy and read (and re-read) this book!

for more information click here

Warren Buffett's Bible!

Graham's approach is aimed at minimizing the odds of irreversible losses and maximizing the chances of sustainable gains. (Many dot-com and telecom stocks lost 95% of their value by the end of 2002, requiring a 1,900% gain to get it back. That illustrates why Graham constantly emphasizes the importance of avoiding losses.) Unfortunately, Graham died over 30 years ago, and thus his material and examples are dated; the good news is that Jason Zweig provides an update for each chapter.

Familiarity with a stock (eg. one's own employer) breeds complacency that should not be allowed. The importance of diversification is illustrated by the fact that the average net worth of a 1982 Forbes 400 member was $230 million - staying on the list until 2002 required only 4.5%/year growth (less than bank accounts), but only 16% made it.

Large funds, with large amounts to invest, frequently end up owning the same large stocks (only a limited # can handle the volume), thus creating an overvalue situation.

Portfolios should be viewed over a 10-30 year investment horizon. The most lucrative sector of any given year often turns out to be among the worst performers of the following year. Buffett and graham both praise low-fee (.75% for taxable and municipal bond funds, 1.25% for small stocks, 1.5% for foreign stocks, and 1.0% for the rest) index funds a best for individual investors.

Graham believes five elements are key to determining P:E ratios: 1)Long-term prospects. (Watch out for serial acquirers" - an average of over 2-3 acquisitions/year suggests limited faith in its own opportunities. Also those relying on a small # of customers.) 2)Pluses include a strong brand identity (eg. Harley-Davidson), economies of scale, resistance to substitution (eg. electricity). 3)Consider the potential flood of newly exercised shares via options. 4)Rapid growth companies are vulnerable to eventual decline in their growth rates.

Accounting abuses include pro forma reports (had not . . .), book revenues early, capitalizing expenses, overly optimistic pension-fund investment returns.

Steer clear of companies with capitalization less than $2 billion, current assets < 2Xcurrent liabilities, lacking earnings for at least 10 years, failing to increase EPS at least 1/3 over the last ten years, P/E greater than 15.

for more information click here

Have a Margin of Safety and believe in your analysis!

The Margin of Safety principle is probably the main thing to get from this book. The book gives many comparisons and instructive historical examples, but is a bit lacking in terms of actual advise on how to conduct an analysis, even though the book was supposedly aimed at the layman reader.

I would recommend browsing this book and focus mainly on the two chapters already recommended by Warren Buffett, namely the chapter about stock market fluctuations and the chapter about margin of safety. Concerning the overall philosophy of long-term investing I prefer Phil Fisher's book: Common Stocks and Uncommon profits.

In addition you will also need a proper book on valuation, although Graham does give a very simple valuation formula, I feel it is too focused on earnings (that is, the 'net income' which is often deceptive due to depreciation, new investments, etc.), and I personally prefer a proper Discounted Cash Flow model. Check my other reviews if I should one day post a review for a good book on valuation.

for more information click here