The Intelligent Investor
First edition
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| Author | Benjamin Graham |
|---|---|
| Cover artist | Donavan Hayes |
| Country | United States |
| Language | English |
| Subject | Securities, Investment |
| Publisher | Harper & Brothers |
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Publication date
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1949 |
| Pages | 640 |
| ISBN | (2008 edition) |
| OCLC | 1723191 |
| LC Class | HG4521 .G665 |
The Intelligent Investor by Benjamin Graham, first published in 1949, is a widely acclaimed book on value investing.
The Intelligent Investor is based on value investing, an investment approach Graham began teaching at Columbia Business School in 1928 and subsequently refined with David Dodd. This sentiment was echoed by other Graham disciples such as Irving Kahn and Walter Schloss.
The Intelligent Investor also marks a significant deviation to stock selection from Graham's earlier works, such as Security Analysis. He explained the change as:
The thing that I have been emphasizing in my own work for the last few years has been the group approach. To try to buy groups of stocks that meet some simple criterion for being undervalued-regardless of the industry and with very little attention to the individual company... I found the results were very good for 50 years. They certainly did twice as well as the Dow Jones. And so my enthusiasm has been transferred from the selective to the group approach.
Graham's favorite allegory is that of Mr. Market, an obliging fellow who turns up every day at the shareholder's door offering to buy or sell his shares at a different price. Often, the price quoted by Mr. Market seems plausible, but sometimes it is ridiculous. The investor is free to either agree with his quoted price and trade with him, or ignore him completely. Mr. Market doesn't mind this, and will be back the following day to quote another price.
The point of this anecdote is that the investor should not regard the whims of Mr. Market as a determining factor in the value of the shares the investor owns. He should profit from market folly rather than participate in it. The investor is advised to concentrate on the real life performance of his companies and receiving dividends, rather than be too concerned with Mr. Market's often irrational behavior.
Since the work was published in 1949 Graham revised it several times, most recently in 1971–72. This was published in 1973 as the "Fourth Revised Edition" , and it included a preface and appendices by Warren Buffett. Graham died in 1976. Commentaries and new footnotes were added to the fourth edition by Jason Zweig, and this new revision was published in 2003.
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