Summary The Intelligent Investor

The Intelligent Investor

Today’s book, The Intelligent Investor, is recommended by Warren Buffett. You can read a 15 minute summary of this book here or buy hardcover book here. Here are ten popular highlights from this book.

  1. Graham urges you to invest only if you would be comfortable owning a stock even if you had no way of knowing its daily share price
  2. An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.
  3. Obvious prospects for physical growth in a business do not translate into obvious profits for investors.
  4. It simply means being patient, disciplined, and eager to learn; you must also be able to harness your emotions and think for yourself.
  5. To enjoy a reasonable chance for continued better than average results, the investor must follow policies which are (1) inherently sound and promising, and (2) not popular on Wall Street.
  6. The intelligent investor realizes that stocks become more risky, not less, as their prices rise — and less risky, not more, as their prices fall. The intelligent investor dreads a bull market, since it makes stocks more costly to buy. And conversely (so long as you keep enough cash on hand to meet your spending needs), you should welcome a bear market, since it puts stocks back on sale.
  7. The defensive investor must confine himself to the shares of important companies with a long record of profitable operations and in strong financial condition.
  8. Those who do not remember the past are condemned to repeat it.
  9. There is intelligent speculation as there is intelligent investing. But there are many ways in which speculation may be unintelligent. Of these the foremost are: (1) speculating when you think you are investing; (2) speculating seriously instead of as a pastime, when you lack proper knowledge and skill for it; and (3) risking more money in speculation than you can afford to lose.
  10. Never mingle your speculative and investment operations in the same account, nor in any part of your thinking.

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