Todd N's Reviews > The Intelligent Investor

The Intelligent Investor by Benjamin Graham
Rate this book
Clear rating

's review
Nov 19, 2008

really liked it
bookshelves: kindle, 2008-xmas-gifts, finance

I didn't so much read this book as skitter around it like a chimp in 2001: A Space Odyssey. By the time Santa brought me this book I was already pretty set in my ways about how I was going to handle my finances. But I appreciated that it was consistent with my thoughts in its own 37-years-ago way. Index funds were just a gleam in John Bogle's eyes at that point, and I don't think there were even many mutual funds around then.

Mr. Graham is probably most famous for being the mentor to Warren Buffett. The back story is that Mr. Graham lost a bunch of money for his clients in the Depression, which greatly clarified in his mind the difference between speculating and value investing.

He divides investors into two groups: "Enterprising," meaning willing to spend a bunch of time on researching and investing, and "Defensive," what we would call passive today, meaning someone who wants a basically automatic portfolio.

The philosophy for the defensive investor is still considered pretty mainstream today -- mix of stocks and bonds, always between 25% and 75%. All the nifty modern tools like international index funds and bond funds weren't around back then, so he offers advice on how to pick stocks and bonds. I've read some articles that apply his criteria to today's stock market and only find a few stocks to buy. So either the stock market is crazy or Mr. Graham's criteria need to be adjusted. Fortunately, we don't have to decide.

At the end of each chapter is commentary by Jason Zweig, who also writes one of the few decent investing columns available (in the WSJ). Because this edition came out in 2003, the lessons learned are mainly from the dot-com boom. The examples mentioned feel dated since the latest financial troubles. Some companies Diana and I worked for are mentioned as cautionary tales, which set me off on reveries of back when I was rich. We are still involved in class action suits because of stock we owned in other companies mentioned in the commentary.

I would only recommend this book for historical interest. There are a lot more concise and up to date books on this topic. If you are going to become a day trader (or whatever they are called), then you should definitely read this book but keep in mind that a lot of the investment opportunities that made Mr. Graham and Mr. Buffett rich are no longer available.
2 likes · flag

Sign into Goodreads to see if any of your friends have read The Intelligent Investor.
Sign In »

Reading Progress

November 19, 2008 – Shelved
November 19, 2008 – Shelved as: kindle
December 27, 2008 – Shelved as: 2008-xmas-gifts
Started Reading
January 1, 2010 – Finished Reading
March 18, 2010 –
page 257
October 14, 2010 – Shelved as: finance

No comments have been added yet.