The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel
Amazon.com Review
The hallmark of Graham’s philosophy is not profit maximization but loss minimization. In this respect, The Intelligent Investor is a book for true investors, not speculators or day traders. He provides, “in a form suitable for the laymen, guidance in adoption and execution of an investment policy” (1). This policy is inherently for the longer term and requires a commitment of effort. Where the speculator follows market trends, the investor uses discipline, research, and his analytical ability to make unpopular but sound investments in bargains relative to current asset value. Graham coaches the investor to develop a rational plan for buying stocks and bonds, and he argues that this plan must be a bulwark against emotional behavior that will always be tempting during abrupt bull and bear markets.
Since it was first published in 1949, Graham’s investment guide has sold over a million copies and has been praised by such luminaries as Warren E. Buffet as “the best book on investing ever written.” These accolades are well deserved. In its new form–with commentary on each chapter and extensive footnotes prepared by senior Money editor, Jason Zweig–the classic is now updated in light of changes in investment vehicles and market activities since 1972. What remains is a better book. Graham’s sage advice, analytical guides, and cautionary tales are still valid for the contemporary investor, and Zweig’s commentaries demonstrate the relevance of Graham’s principles in light of 1990s and early twenty-first century market trends. –Patrick O’Kelley
Review
Tagged with: Book • Counsel • Definitive • Intelligent • Investing. • Investor • Practical • Value
Filed under: Worth While Investment
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kreubley jarrosepel 
jean 
hader 
hys 
When I first came across the first edition of this book in my local library in 1959, I was a teenager. Back in those days there were only a handful of books about the stock market. And I’ve read all of them during my junior high and high school years.
This latest updated 623-page paperback (the index alone is 33 pages) version updated by Jason Zweig is a welcome addition to this classic. The original chapters are intact, but with footnoted comments by Zweig. Moreover, he provides his own commentary on each chapter contents in a separate chapter following each original chapter. He provides extensive research, charts, tables and commentary that updates the book to the present years. He is not afraid to take on the big guns of Wall Street and show how wrong they were in some of their extremely bullish predictions during January-March 2000, when the market was at its peak.
The first nine chapters cover investing basics that all investors could benefit from. There are many truisms spouted on Wall Street that are not really true. These chapters provide the investor with a realistic picture of how Wall Street works and what investors need to do to come out ahead.
Chapters 10-20 focus strictly on fundamental analysis, stock selection, convertible issues and warrants, and other subjects. Investors who plan to invest directly in stocks should make sure to read these chapters. However, for readers more interested in investing in mutual funds, and in particular index funds, they need not concern themselves with all the detail in these chapters unless they have the time or interest in the subject matter presented.
In conclusion, the combination of pioneer Ben Graham?s original work coupled with Zweig?s meticulous and enjoyable update, make this a remarkable book about investments and investor behavior that every new and experienced investor should read. Of the 500 investing books that I?ve read, this one certainly is one of the greats of all time.
This book is light reading compared to Ben Graham’s seminal tome, Security Analysis. It’s easier to read, and shorter. It’s also more up to date. Highly recommended for investors of any stripe, value or growth. The appendix, from Warren Buffett’s speech at Columbia University is particularly entertaining, as he debunks academia’s love affair with efficient market theory. Jason Zweig, an obvious Graham disciple, does a fantastic job bringing the book’s principles to life through modern examples. The only grating thing is his constant derision of brokers or anyone that actually gets paid to manage money. (full disclosure: I’m an analyst now and was a broker for 10 years).
Ben Graham clearly invested in the stock market during a period of hustlers, crooks, crashes, and frauds. Brokers, investment bankers and analysts back then were not much more than fast-talking salesmen. Wait a minute, that sounds just like the way things are today on Wall Street! Things may not have changed as much as we would like to think. Due to his travails as an investor in difficult markets, Ben Graham’s investment style evolved into a systematic, logical approach which became the basis for value investing. In “The Intelligent Investor”, Graham lays out the foundation of value investing by three introducing key principles: the idea of “Mr. Market”, a value-oriented disciplined approach to investing, and the “margin of safety” concept.
“Mr. Market.”
The stock market on a daily basis resembles a casino, only without the comfort of free cocktails. Watching the stock ticker is like having a business partner that is totally schizophrenic; Graham calls him “Mr. Market.” One day he loves the business and wants to pay a ridiculous price to buy out your half. The next day, all hope is lost, and he wants to sell you his portion for pennies on the dollar. Graham argues that this daily liquidity is an advantage that most investors turn against themselves: (p. 203) “But note this important fact: The true investor scarcely ever is forced to sell his shares, and at all other times he is free to disregard the current price quotation. He need pay attention to it and act upon it only to the extent that it suits his book, and no more. Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all; for he would then be spared the mental anguish caused him by other persons’ mistakes of judgment.” This is profound. It’s not a question of whether our stocks will drop; they will: the trick is how we respond to that eventuality.
Ben Graham’s Stock selection for the defensive investor.
Graham lays out some important characteristics of “value” stocks. (p. 348). Some of the metrics are dated, but the principles are still valid. Even deep value investing today would seem like GARP investing to Ben Graham. Investors are now more focused on future earnings than they were in his day, and valuations reflect that. Graham recommends:
a. Adequate size of the enterprise (>$100M revenue, old figure)
b. Sufficiently strong financial condition (2:1 current ratio)
c. Earnings stability (some earnings every year last 10 years)
d. Dividend record (uninterrupted payments for at least 20 years)
e. Earnings growth (1/3 increase in per share EPS past 10 years)
f. Moderate price/earnings ratio (P/E < 15x average last 3 years EPS)
g. Moderate ratio of price to assets (price/book < 1 1/2 times)
h. Overall stock portfolio, when acquired, should have an overall earnings /price ratio- the reverse of the P/E ratio – at least as high as the current high-grade bond rate. A P/E no higher than 13.3 against an AA bond yield of 7.5%
Margin of Safety as the central concept of value investing.
This is an investment rule that was written by a man who had been deeply bruised by bear markets. I believe he came up with this by learning from his losses. When the market turns into a storm of feces, like it inevitably will, if the stock has no earnings to rely on, you have nothing to grab onto. You can’t make yourself stay in the stock when the price is down. Graham says: (p. 515) “The margin of safety is the difference between the percentage rate of the earnings on the stock at the price you pay for it and the rate of interest on bonds, and that is to absorb unsatisfactory developments”. Furthermore he writes: (p. 518) “The buyer of bargain issues places particular emphasis on the ability of the investment to withstand adverse developments. ” You can and will still lose money in the market with value-oriented investing, but according to Graham: (p. 518) “The margin guarantees only that he has a better chance of profit than for loss-not that loss is impossible.”
Conclusion
So that’s it, those are the three basic points of the book, but you should still buy it and read it, it’s a very enjoyable experience, Shakespeare for the investing crowd. Despite being a realist, Ben Graham wasn’t a total pessimist. Late in the book Graham makes a point that is one of my favorites: (p. 524) “A fourth business rule is more positive: “Have the courage of your knowledge and experience. If you have formed a conclusion from the facts and if you know your judgment is sound, act on it- even though others may hesitate or differ. You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right. Similarly, in the world of securities, courage becomes the supreme virtue after adequate knowledge and a tested judgment are at hand. “
Graham’s writing is clear, concise and level-headed. He warns against unreasonable financial expectations and proceeds to explain his theories in sufficient detail to be worthwhile, without being over the comprehension of the layman interested in investing.
The book is lengthy and “solid”, as opposed to other finance books that hope to explain investment in 100-200 pages. Topics include stocks vs. bonds, inflation, security analysis, and margin of safety (Graham’s analysis of the assets of a company in relation to its debt). Zweig’s commentary is useful, with footnotes to clarify historical references and, occasionally, demonstrate instances where Graham’s predictions proved untrue. At the end of each chapter, Zweig uses recent (up to early 2003) examples of Graham’s concepts to make things clearer to modern readers. (Graham’s text itself is his 1973 revision to the original 1949 edition.) Also helpful are numerous references to online articles at various sites (I cannot yet vouch for these links’ present state.)
Based on my understanding, I highly recommend this edition to anyone interested in this book. I feel that I gleaned more from this annotated edition than I would have from the original, without having to conduct additional research.
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I would thinks its pretty cool if a helicopter was above my house. Especially since im stoned all the time.
You can learn how to lose alot of money real fast, but on the other hand you can also make money real fast….it's unpredictable…you never know what the next day holds.
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Activist targets Barnes & Noble: US activist investor Ron Burkle has written to Barnes & Noble seeking to acquire …
King louis Prima ! ))
“Thanks. I hope that Scripting News is the kind of place you can get
that kind of value from discussions at.”
If you have already spoken to her, and if she does her job, there is not much that you can really do. In my experience, people who have an attitude can change for a short while after discussion, but inevitably revert back. If this is more of a personality rather than a performance issue, you will have to determine if she is harming the work environment of others, and you may choose to let her go, because your options are limited. I always try to work with people, but there are definitely people who are difficult and who do not fit in, and they cause a lot of negativity for everyone. If someone is truly unhappy, they should work somewhere else.
Crystal – Stevie Knicks… or Nicks. Sorry, I can’t remember the last name right. But yeah, everything else is right.
"Try not to become a man of success, but rather try to become a man of value…" although, to be both would be awesome!
05neal Oh your God, the same again. You have no idea what a scientific theory actually is, and has not the slightest notion of how science works. I will not go in the same discussion here again. Please see my other comments on this video. His sense of theory is the common sense of theory, not a scientific definition of theory!
Is the docs best answer to the tests and results and is used to "guide" further tests and the insurance companies use it to "justify" the tests. IE an MS diagnosis and a pap smear would not fit and the test would be denied as not relavent to the diagnosis. You'll get the final one from the doc, not your ins co. website.
Emergency First Aid Guide-book Pays 60% Commission!:
ARTICLE: Palm updates investor guidance for Q3 2010, and it doesn’t look good
Today, Google is testifying in front of the Senate Judiciary Subcommittee on Human Rights and the Law to address internet freedom and censorship, particularly calling attention to the recent security and censorship issues in both China and Iran. Google’s Deputy General Counsel Nicole Wong is presenting testimony on behalf of the search giant, which we’ve embedded below. Much of the testimony outlines the background on what happened in the China security breach, where the Gmail accounts of human rights activists were breached by hackers in China. The attacks were systematic and also extended to 20 other companies, including Intel. Google is unwilling to shed light on who initiated the attacks because the investigation is ongoing.
It's one of the six stories in The Wonderful Story of Henry Sugar and Six More by Roald Dahl.
from this I discern that it might be the wonderful story of Henry Sugar as well. I know because I read it like five times when I was in elementary.
Agreed. A great book. You can open it at any page and magically glean inspiration or a new perspective to apply to whatever you’re working on.
Actually it is speculated that Velociraptors were not very smart at all! If perhaps you were referring to the "Jurassic Park" series in which one sees 'Velociraptors' (which were actually Deinonychus', a much larger relative of Velociraptors) opening doors, dinosaurs were actually in no way capable of such a feat. It is estimated that almost all dinosaurs were less intelligent than birds!
One way for paleontologists to guess how smart a dinosaur is the ratio between the size of the brain cavity and the body. The Cretaceous' Troodon, a speedy, bird-like dinosaur, best fits this description. It has one of the largest-known brains of any dinosaur. It is speculated this animal had amazing vision, including binocular vision, or depth perception. Some have reason to believe that this species was smarter than the mammals living at the same time!
how to get value without
tag using regex n java?
my String is:
USA
output should be like:
West Newton, MA 02465 USA
my pattern is like:
Pattern p8 = Pattern .compile(“
\s+
“); Matcher m8 = p8.matcher(responseBody);
i didnt get anything as result. what i have to put there(instead of ([^<]*)).
How?