Book Review: The Intelligent Investor by Benjamin Graham

This book was written by Benjamin Graham in 1949, and is one of the classics of the investing world.

Graham was a professor at Columbia University, and made a ground breaking study of investments, pioneering the style of investing known as “Value Investment”. One of his students was the young Warren Buffett, who in his preface to The Intelligent Investor wrote:

I read the first edition of this book early in 1950, when I was nineteen. I thought it was by far the best book about investment ever written. I still think it is.

The book covers the difference between investment and speculation, a history of the stock market since 1871, how inflation affects investment, and how to build a defensive portfolio.

As expected from an academic, the book is often quite dense and detailed, but I would recommend the reader to persevere. Graham often is quite sceptical about Wall-Street types, and quite pessimistic about the ways in which corporations try to mislead shareholders about how well the really are doing.

I would recommend this book to anyone serious about investment. It's analytical and sceptical approach is of real value in these days of cheerleading of stocks, and the reader will benefit from learning how to avoid pitfalls and how to cut through the marketing hype to find stocks of value.