Summary 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.
- 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
- An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative.
- Obvious prospects for physical growth in a business do not translate into obvious profits for investors.
- It simply means being patient, disciplined, and eager to learn; you must also be able to harness your emotions and think for yourself.
- 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.
- 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.
- The defensive investor must confine himself to the shares of important companies with a long record of profitable operations and in strong financial condition.
- Those who do not remember the past are condemned to repeat it.
- 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.
- Never mingle your speculative and investment operations in the same account, nor in any part of your thinking.
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