The Intelligent Investor Summary

Find Out About The Psychology Of Investing In A Fraction Of The Time It Takes To Read The Actual Book!!!

This book announces early on that its purpose is to help an average person adopt and carry out an investment policy. Rather than focusing on analyzing securities, the book devotes itself to explaining investment principles and attitudes. Its history of republication and new editions certainly secures its place as a worthwhile read for any serious investor. The fourth edition preface by Warren Buffett, in which he claims that this is the best investment book he has read, does not hurt either.
In the introduction, Benjamin Graham explains that the book presents principles for intelligent investing while warning that there are no foolproof ways to make money. He names two types of investors: the defensive and the enterprising. The defensive investor is passive; his chief purpose is to avoid making serious mistakes or losses while also putting in less effort and making less frequent decisions. The enterprising investor is active or even aggressive; he is more than willing to devote time and energy to selecting securities that are stable and more attractive than average. Graham explains that the enterprising investor may expect better returns for his extra effort over the course of a few decades, but Graham doubts that substantial gain is guaranteed for that investor. He also details examples of how investment professionals, the experts, can and have been wrong. For instance, many investment companies favored airline stocks because they foresaw the number of travelers rising; the premise for their faith in these stocks was true--the number of frequent fliers did rise. However, the airlines themselves struggled to be profitable. A the same time, many of those investing professionals realized that computers would become ubiquitous for businesses at least, but they were not certain of this growth in this field, so they limited their investments in computer companies and did not necessarily privilege the one computer company that heavily paid off its investors, which was IBM. These examples lead Graham to naming two morals: that obviously good prospects for growth in a business do not translate into obvious profit for the investors, and that the experts do not have dependable methods of selecting the most promising companies in the most promising fields. This first moral; that obviously good growth prospects do not translate into obvious profit, needs further explanation. If most investors are expecting massive growth in one industry, than that industry would seem like the obvious one to invest in, but the prices for its stocks have already increased from so many people buying it, that its future returns must go down. A stock becomes more risky as its price goes up and less risky as its price drops.

Here Is A Preview Of What You'll Learn When You Download Your Copy Today

•Learn How Companies Change Financial Records To Mislead Investors

•Learn Why Warren Buffet Considers This Book To Be One Of The Most Important Investing Guides

•Learn About Why You Should Not Focus On A Single Year Of Earnings When Researching Business Investments

•Learn About How To Have The Correct Mindset Or Psychology To Make A Successful Investment