The Intelligent Investor: Summary & Key Lessons

Warren Buffett says The Intelligent Investor by Benjamin Graham is “by far the best book on investing ever written,” and he’s not the only one. First published in 1949, this book created the basis for value investing – the process of purchasing assets at lower price points than their actual value and avoiding the emotional ups and downs of the market.

Benjamin Graham’s most lasting contributions are “Mr. Market”, your manic-depressive business partner offering wildly fluctuating prices each day (and giving you the option to completely disregard him), and the “margin of safety,” or buying with enough of a cushion that you have room for error should you be wrong about your investment decisions. The book can be described as dull and dense; however, its fundamental principles are rock solid.

Key takeaways:

• Make your investment decision based upon the true intrinsic value of a company rather than the daily whims of the market.
• Always require some form of margin of safety to provide protection from errors and bad fortune.
• It is an investor’s temperament which determines success – not his or her intellect.

Who it’s for: serious, long-term investors who seek principles versus short-lived tips. This will not be a fast read for new investors; however, it may serve as a lifetime reference guide.

The verdict: the definitive guide to value investing, this book should be mandatory reading for anyone seeking to build wealth through investments in financial markets, while avoiding speculation. Read this alongside The Snowball to view Graham’s philosophy put into practice.