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.

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.

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!

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.

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

Having being for some time a small investor with mixed results I was trying to learn more about the dynamics of the stock market. Benjamim Graham makes an excellent case for value investing which distinguishes true investors from speculators. It is as actual today (if not more then) as it was first written several decades ago. If you only read one book about stocks, be sure you pick this one. Highly recommended!

I have been reading the intelligent investor for a couple of days now and just finished chapter 4. The book can seem a bit long but it is not. The arguments are easy to understand and comprehend. Graham argues that investment, as great as it could be, also contains significant risks and for long periods of times have not outperformed bonds when considering inflation. He thinks every intelligent person should have no more that 75% in equities in best of times and should have up to 75% in bonds in bad times. It is definitely a book worth reading not only because he reaches sensible conclusions and warns you not to blindly follow pundits but simply because it gives you overview on market performance by analyzing the historical data that should be mandatory knowledge for everyone serious about investing.

This book has some great chapters that can be used to create a good stock screen to purchase value stocks. One point in this book that I found very valuable is this: No matter if you are in a bull market or not always keep at least 30% of your funds in cash or bonds. This at least saves some of your cash if the market turns around and heads lower. Think of the Nov 2007 to March 2008 downturn. Many people fully invested in at least stock founds in 401ks (that did not sell) lost up to 20%. How long will it take the old "buy and hold" to recover from that?

[...]

This is the first book written on the subject of describing/detailing life cycles of stocks/mutual funds and really getting into the detail so its all understood.

An all time classic from Mr. Benjamin Graham, and still relevant to this day. If you think it is an outdated stuff, I humbly request you to think again. I have read quite a lot of books on investment and none I found come closer to this one, whether you consider the philosophy or the practical implementation.

You may not believe me, and I am not asking you to do so. I am only requesting you to read this book once before you start investing, then go ahead in the world of investing.

When you think you have made somekind of mistake in investing, go back and read the book again, and I can say 99% of time you will find something in this book which if you have followed, would have avoided the mistake. It's a personal experience.

I feel retarded reading this book.

Seriously, I know a good deal more than the average about the market...but I am not a savvy investor. I would not advise people like me to get too into this book. Maybe start with a Motley Fool book or Peter Lynch.

I really really enjoy the footnotes by Jason, and also the commentary in between chapters, it speaks in a much more reader friendly tone.

Obviously this is "The Book on Investing" so maybe I'll re-read it later in hopes of getting more out of it.

Graham's viewpoint is based on Amrican stock market, but very useful in emerging markets too. Though rarely heard in Taiwan, Mr. Graham has inspired me in making smart investment in the local stock market. I, for the last two years, have been going over this book and surprisingly find how insightful Graham are in looking at the basic human nature in the market. Attitude, rather than the principles of choosing stocks, is what I think Graham contribute to me in making my own investment. My incestment is growing, no matter how hard the time has been. Fear for the inexplicable stock market is the core of this book and is the most precious part. Ch.8 and Ch20, as Warren Buffett recommended, are those most worthy of reading, and they make me and my portfolio stronger every day, even in bear market. Discussions on mutual fund (CH9) keeps me away from losing money. Principles on how to choose stocks generate real money for me. I am not reading this book to be second Warren, I am reading it to be a rich long-term investor, which I am now feeling more possible than before I read it.

This book has always been hailed for its breakdown of technical financial terms and investing for the layman. If you are new to investments and know nothing at all you should just buy a book for "Dummies". If you do have some experiance and need guidance: Buy this book! This is really the only book on investing you should own. It's principles will last forever. It's All About Value, Baby!

Benjamin is a great philosopher of stock market rather than a normal technician. After so many years passed, you just how his ideas are proving to be accurate, yet.
The only thing that he was wrong about, was commodities. He didn't believe it but time has proved that it's a safe haven for cash through many years.
The commentary given after each chapter is also helpful as sometimes it's a little hard to understand Benjamin's literature.

I probably shouldn't weigh in quite yet since I'm only halfway through this big book, but even though I know next to nothing about the stockmarket, I find if I just go slowly, read a section at a time, I'm getting it. Also, Jason Zweig's commentaries on each chapter and his annotations are extremely helpful. If you really want to invest in the market, I think this book is a must read even if you hire a firm to do it for you.

I had a good experience purchasing this product. It arrived in a timely manner; actually even faster than I expected. It was in great condition and helped me save a lot of money; if I had to purchase from somewhere else.

This book is very good if you are interested in bond and stock investments. Gives you lots of advices. The first chapters are a bit boring, because of all the talk about ancient enterprises... The comments by some Zweig guy are absolutely stupid and boring, and are only there to add weight to the book. 4 Stars

I unfortunately first entered the stock market in the frenzy of the 1990s. I felt brilliant as my stock picks skyrocketed and like an idiot when they collapsed. The second adjective more accurately described what I knew about investing. I had heard about this book for some time and finally got around to reading it. It provides a common sense, basic approach to investing. Benjamin Graham writes in the gentlemanly style of the early twentieth century and covers a lot of fundamental topics. His passages are a bit dated and can by dry at times. Jason Zweig produces updated commentaries on each chapter in the more cynical and fast-paced style of the present era. He can be brutal in his criticisms of celebrity investors and advisors. Overall it is an excellent book that should be part of an investing library, but other books are out there that give the same sound advice in a more compact form.

Congratulations! If you are thinking of buying this book, chances are that you are serious about the investing. If you are very new to investing then this book is not for you just yet. I would recommend you to read the books that warn you about the risks of stock picks and about the efficient market theory. You must enter in stock market with utmost caution and suspicion because ease of investment has somehow watered down the understanding of the risk involved in the stock market.

This book is written by the dean of value investment field. Now a days almost all money managers call themselves value investors but after reading this book you would be able to separate the wheat from the chaff. Many people have criticized the book to be archaic but they are probably the same people who heralded the dot com bubble as the dawn of the "new era". The book is timeless and is as relevant today as it was in the past. Of course the book does not tell you about the fancy investment vehicles such as options and futures but what it tells you is the most important lesson in business not just in investing. It is the lesson of discipline and value. Ben Graham has shared his observation over several decades in the book. He goes on to show the cyclical nature of the economy and then demonstrates that disciplined approach to value investing with enough margin of safety is the only way of making money in stock market. It is easier said than done because with the intention of following the "buying low and selling high", most people end up doing exact the opposite. This is why Mr Graham said "The worst enemy of an investor is well, himself". This is where the discipline comes into the picture. Mr Graham goes on to show the consequences of not following the discipline. On a personal note, I have faced the consequences of not following the discipline.
In the end I would say if you have read this book once, you should read it once every year.

http://valueinvestmentblog.com

If you want to consistently make money, this is the book to read. Amazing book.

The Intelligent Investor is a great book when taken in context: It's a classic text of value investing with a few key ideas that translate well over time despite the passing of the years. The context is important, as Graham founded his ideas before most of the theories of efficient capital markets were developed, and was heavily influenced by the great depression.

The book draws the distinction between three types of investors: The conservative investor (should only buy goverment debt, and not a target of the book), the speculative investor (also not a target of the book) and the enterprising, or intelligent investor, whom the book covers.

There were three key takeaways from this book:
1) The concept of Mr. Market as a manic depressive counterparty. Sometimes he loves a stock, sometimes he hates it. As the investor, you can wait for when he comes to you.

2) The importance of a margin of safety. Initially this is viewed in terms of assets (a company with more net assets than market cap) though the margin of safety can also be competitive. (It's worth noting that points 1 & 2 are the key points highlighted by Warren Buffett, Graham's most famous student)

3) The level of risk someone is willing to take should be dependent on their ability to research and understand their investments. This runs against the grain of passive portfolio theory, but is indespensible to an individual stock picker.

Despite these points, the book is a product of two times. The original writings by Graham are filled with many accounting and analytical techniques better suited for a prior era. The book is more about principles. Additionally, there's a disproportionate emphasis on Jason Zweig's (very useful) chapter-by-chapter analysis on modern internet duds.

All that said, this book rightfully belongs on every value investor or afficianado's bookshelf, and the updates by Mr. Zweig are a worthwhile addition to bring the book into the modern era.

I was drawn to this book first because W. Buffet suggested it. Secondly, I was draw to this book because it was first written in the '20's or '30's and has continued to have a strong following ever since. With today's fad investment books lasting a few weeks or may a couple years before their flaws are exposed this appeared different.

I can say that this book was different. If you compare this to say Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money--That the Poor and Middle Class Do Not! OR Rich Dad's Guide to Investing: What the Rich Invest in, That the Poor and the Middle Class Do Not!, you will see actual information being provided rather than general concepts. You will also see that the author has enough information to fill out the pages of the book rather than repeating every fourth sentence just to make it to the end.

I read this book through and had to significant take aways for myself.

First, I am not an investor in the sense demanded by this author and demonstrated by W. Buffet. I just simply do not have the wherewithal to travel to companies that I intend to invest in.

Second, I now understand why so many people suggest diversification as an investment strategy. They are doing so because it is the first step to time-averaged investing. They just do not explain the second step to that strategy which is balance. This book lays this out and it is the first time I have seen this investment strategy throughly explained. So, now that I understand the point, I have made changes to my portfolio to balance my investments and keep them balanced. This method is so much easier than what I was previously doing and is very likely to produce the same results for me as I am not an investor of the order of W. Buffet.

I got a book of financial advice from many CEOs of famous companies and many of them cited this book. The edition I got has a modern commentary with examples from recent events (2003.) This book is generally geared to Value Investing for the long term. Warren Buffet orginally read this book in 1955 and used it as a tool to build Berkshire Hathaway.

Take your time to read this book.

I am new to the investing discipline, but I found this book a comprehensive, well-written, and helpful overview of the knowledge that is required to make sound investments.

The tone is 'text-book'-like, so really pay attention and don't rush through pages and chapters.

I already plan to read this book again because there's so much to be learned.

It is truly remarkable that most of Graham's principles from the 1950s are still relevant today. Don't get swayed by the overblown hype of CNBC, Fox Business, CNNfn, etc. You can make long-term, profitable decisions once you have the knowledge that's throughout this book.

Definitely worth the money.

Dan Naden

I read both this version and Graham's original version. This one expands on Graham's thoughts and adds to the length of the original(a good thing). This book gives you a good explanation about how the market works and how to maintain a margin of safety when you invest(in essence, a margin of safety allows you to break even on a stock purchase if things don't go as planned with the company). Some of Graham's methods don't work well anymore since so many people are involved with the market now but they are still interesting nonetheless. Yet every once in a while things come back into vogue so keep an eye out.

very good and I liked it alot i'm just start investing and I' throughly enjoyed it........

For the investor looking to build the most solid foundation into understanding how to evaluate stocks, this is an absolute must to have on the shelf.

I read some negative reviews on the book because some didnot like Jason commentary to what Graham said. I think this is unfair criticism because Jason made BEST effort to separate his commentary from original work of Graham.

This book is a great read. It's very logical and practical. Graham's principles are somewhat conservative but that doesn't mean you don't make money, it just means you're smart about it or an "intelligent investor." The commentary provided at the end of each chapter helps to clarify and put it into today's context. I would suggest knowing very basic information on investing before reading this.

A must-read for anyone who has a serious interest in investing. While very informative, I do have to admit the prose is a bit stilted and it was a slog in some places. The commentary by Jason Zweig was excellent and gave a much needed change of pace from the text.

While it's true that many of the ideas presented here are now old-hat and can be found in many other books, there is something fascinating and sobering about reading the source. I think it will give any investor a historical dimension to their thinking that will prove valuable to them.

This is basically Graham's original book with commentaries by Zweig who tries to make the book more enjoyable by relating it to the stock market in the late 90's. There are numerous commentaries and footnotes in Graham's chapters. In addition every other chapter is one written by Zweig. Overall, Zweig adds value by making Graham's original book more readable.

Ben Graham's writings (who was Warren Buffett's, arguably the world's greatest investor, teacher) are absolutely essential for any serious investor. Whether you agree or disagree with his views, as an investor in the stock market one needs to be familiar with Graham's theories and thoughts. I think that this book only adds to Graham's original book. If you are annoyed by Zweig (which I wasn't) you could always skip the chapters by him. Some have said that the commentaries are hard to ignore, but I believe overall Zweig does an excellent job applying Graham's teachings to the current situation in the market.

I usually pass my books to others but I plan to keep this one forever in my refernce library.

Anyone who chooses to comprehend this classic text will without a doubt expand their knowledge within the universe of value investment techniques. Moreover, in these times of muddled distinction between the investor and speculator, there is no better reason to buy this precious piece of Graham's intellectual genius than now. For myself, this book was truly the first necessary step to bring the perpetual pernicious chaos of what is conveniently termed speculating, to a more lucid order as I learned the true value of Graham's principles of value investing. We can all benefit to learn from this book.

This is the best book I've read on investing and will remain the standard for value investing.

As the title of this review indicates, do yourself a favour and buy the original Ben Graham version not this one with Zweig.

Let me start by saying that Warren Buffett had nothing to do with this book, the preface and appendix are extracts from the Financial Analysts Journal and transcripts of a 1984 talk at Columbia University.

The orignal Ben Graham material is mostly intact in each chapter. It is not full of calculations, so it is not difficult to read, but it is a slow and deliberate building of an argument on investing. As such people who are interested in the book for its investment advice will find it logical and sensible. Zwieg however has decided that his own footnotes are far more valuable than Graham's so he has moved Graham's footnotes to the appendix and put his notes under the original text - which is why I say that the chapters are "mostly intact", but not completely.

After each of Graham's chapters, Zweig has included a commentary chapter of his own. These chapters and his footnotes will give you the feeling that "a high school science student was commenting on the PhD work of a professor". The commentary is a weak summary, mostly devoid of any insight and sometimes making statements about what Graham "would have said", which is nothing short of egregious.

Overall, I give Graham's original chapters five stars and Zweig's additions one star, resulting in an average of 3 stars.

This book is a clear example of someone jumping on the bandwagon and trying to associate himself with prominent people like Graham and Buffett. So do yourself a favour and buy the original Graham version, that way you won't feel like Zweig suckered you into buying his book, using Graham's name.

Link to the orignal version: The Intelligent Investor: The Classic Text on Value Investing

Everything people have said about how great this book is is true. It's long, and fairly dense subject matter. But if you're serious about learning the smartest and least risky way to invest, this is the book for you. There are no catch-phrases, no acronyms for "proven methods," just straight talk about the methods Graham used in his career.

I came into it with little to no business knowledge, but I felt like everything was explained well enough that even a novice like me could catch up and get something out of it.

Incidentally, a lot of this book fortells doom and gloom for the investor. It is very difficult to beat the market, and it's better to sit in an index fund rather than to do insufficient research. Graham views the day-trading short-term investing as "speculation." While you may pick out a couple of winners and make a lot of money with those couple lucky breaks, the odds are that you will lose ghastly amounts doing this kind of investing. The approach Graham advocates is much more conservative, but a lot smarter too. Ignore the market analysts and the hot tips, and focus on the business, how it's run, and it's soundness as a long-term investment.

It will take years to see if the methods learned will work for me, but they certainly worked for Graham. That and the no-nonsense down-to-earth presentation make me eager to learn more and apply the methods discussed.

Lastly, the 2003 commentary updates the 1972 text wonderfully, and shows that Graham's methods are still applicable today, despite the "new economic model" foretold in the late 1990's.