The Intelligent Investor
by Benjamin Graham
Key Concepts
Mr. Market
The market is a manic-depressive partner offering to buy or sell your shares at wildly fluctuating prices, which you should exploit, not follow.
Margin of Safety
Always buy securities at a significant discount to their intrinsic value to protect against errors and adverse events.
Defensive Investor
A defensive investor prioritizes capital preservation and consistent, reasonable returns over aggressive growth.
Intrinsic Value
Focus on a company's underlying business value, not its fluctuating stock price, to make sound investment decisions.
Investor vs. Speculator
An investor conducts thorough analysis and seeks long-term value, while a speculator gambles on short-term price movements.
Action Items
Buy stocks when they trade below their intrinsic value.
Maintain a diversified portfolio to reduce risk.
Automate regular investments (dollar-cost averaging) to smooth out market fluctuations.
Ignore daily market noise and focus on long-term business fundamentals.
Never invest in something you don't understand thoroughly.
Core Thesis
True investing is about disciplined analysis, protecting capital, and controlling emotions, not market timing or speculation.
Mindset Shift
It shifts your perspective from viewing the market as a predictor to seeing it as a servant for your long-term financial goals.