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VINE VOICEon 21 September 2006
This edition of The Intelligent Investor is really two books in one. There is the original 1973 edition of Ben Graham's classic on "value investing" and then a commentary on each chapter by Jason Zweig.

Graham's text is solid, a little heavy, sometimes a little out of date, and some of his tables a bit user-unfriendly; but no matter: it is the timeless lessons he teaches that matter. He is very methodical, a bit mathematical and -- if you follow him all the way -- will leave you with a good grounding in how to approach the stock market.

Basically his gospel is this: ignore all the hype and blather around the stockmarket. Invest for the long-term in big, rock-steady, simple businesses, after analysing them with a few financial criteria. But only buy when the market is offering them at a bargain price.

Unfortunately, each of Graham's sober tutorials is followed by a commentary by Zweig. He may claim to be a disciple of the great man, but he is certainly not cut from the same cloth. Zweig is just one more financial markets cheerleader: repetitive, pushy, and rolling out the same old disaster stories from the era ad nauseam, supposedly to show how wise Graham was (in case you didn't understand Graham's chapter). He also repeatedly cites his own magazine and keeps naming the same fund, which is annoying at the very least. He also resorts to a lot of "if you had bought shares on every third Wednesday since 1974 you would have made a 3,859 percent return!!" kind of hocus-pocus which is a complete waste of time.

Zweig could have used the opportunity to unpick some of the knottier points of Graham's book and help readers understand the harder parts. The worst thing is that he sometimes goes against Graham's teachings, so he should NOT be taken as an extension of Graham! (For example, on page 129 he says if you don't have time to choose your own stocks, there's no shame in hiring someone to pick them for you. On page 243, he says "In the financial markets, luck is more important than skill". Ben Graham must be turning in his grave.)

One more caveat: this volume boasts a preface and appendix by Warren Buffett, Ben Graham's most famous pupil. But don't be swayed by that. The preface is an obituary written by Buffett and the appendix is an edited talk that Buffett gave in 1984. They're okay but it doesn't mean that Buffett is backing this schizoid volume.

My advice: read the Graham chapters, ditch the Zweig commentary. You'll save time AND be wiser.
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on 19 April 2012
this is considered by many to be the 'bible' when it comes to investing. after reading it - it's easy to understand why.

i originally started reading this a few years ago, but quickly realised i was in way over my head - if you are new to value investing i highly recommend reading easier introductions such as the "little book" series, Lynch's - pOne Up on Wall Street (A Fireside book) ,Common Stocks and Uncommon Profits and Other Writings (Wiley Investment Classics),The Dhandho Investor: The Low Risk Value Method to High Returns,You Can be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits first. these book will act as a great primer before reading this.

since i reading the above books, i decided to give intelligent investor another go. a lot of people out there feel that this book is past it's sell by date as it was originally written in the 1930s - i p[ersonally feel that what is written is just as valuable today as it was back then - the underlying message is that you should only invest in a stock or a bond when the price is well below it's value. this will force you to avoid bubbles such as the internet boom, and also avoid with ease dangerously dodgy companies such as enron, worldcom etc. basically common sense investing. another valuable lesson that graham teaches is that you should split your investments - 50% stocks + 50% bonds and cash - this makes you a defensive investor so that you should be able to ride out the storms and still make a return on you investments...

parts of the book are heavy reading but zweig's commentary does well to explain things and tells you what is out of date - such as railway bonds, but also gives the reader another perspective on what graham writes. also there is a foreword by buffet and a detailed epilogue by buffet as well.

this is a truly fantastic book which will help you become a better investor. i can't rate it highly enough...
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The Intelligent Investor effectively introduces the idea of examining a company's stock as though you might buy the whole company. This is the way that potential acquirers of the company will look at it. If it looks like a good buy as an acquisition, you have the added edge of a potential buy out to help buoy your stocks.
With so many stocks beaten down over the last few years, this is a good time to think about value investing. Also, remember that you can buy value investing indexed mutual funds now. And these have done well through 2004, especially the ones that focus on small capitalization stocks.
In March 2000, many people considered value investing about as useful as high-button shoes. If they had thought about value investing, they would have had another measure of how overpriced the market was. As a result, losses could have been avoided.
On the other hand, value investing will make you money more often than momentum investing will over the years. Long-term studies have shown that small cap value stocks beat the S&P 500 over time.
So even if this does not seem like this approach is right for you, you should learn more before rejecting this alternative.
Here's another reason why: Almost all stocks will be volatile relative to their average p/e, price/cash flow, or price/revenue ratio. By paying attention to this volatility, you can learn a lot about when to buy and sell a given stock. Astute traders based on value principles can also use options to lock in even larger profits, taking the normal ebb and flow of valuation into account.
Those who envy Warren Buffett's track record should understand these principles as well, because these ideas are the basis for some of the Buffett investing style. He later added a perspective on stock markets and human psychology that Graham did not have: Brand names which are attached to quality products and services will tend to outperform the market, especially when they have the potential to expand their geographical distribution around the world and to add new products.
Another benefit of understanding the lessons in this book is to help you know when value investors will probably want to start buying a "beaten down" stock, which will often mark the beginning of the stock's turnaround.
You will look in vain for a better book on value investing, and understanding this subject is like going to Driver's Education when you are learning to drive. It is an important groundwork for being a safe investor.
The most important concept you will ever learn as an investor is that avoiding losses is more important than making gains. It is too hard to make up for the losses, so make more careful buys in the first place and be prepared to leave before your precious capital is dissipated.
If you are a new investor, another lesson for you will be the need to establish a discipline to how you invest. This book will give you a good sense of how that can be done.
Otherwise, the stock market can be an expensive form of gambling. Please do buy, read, think about, and use the insights of this book to create more value for yourself and those you care about. We will all be richer if you do.
After you have finished enjoying this book, I suggest that you also think about where else in your life you should be careful not to make big mistakes. How about in your relationships?
May your wealth compound safely and intelligently for you!
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on 1 May 2006
This book is now re-edited by jason zweig- the message still comes through clearly-there is no easy money anywhere. It takes time and a clear plan to succeed. Let me tell you a small secret and the synposis of the entire book- buy index funds that are cheap as possible( ones with no entry or exit load and with very little maintainence fees). In time they will pay you rich dividends as warren buffet says.

If however you want to do your own research then the book you need to get is security analysis by graham, but let me warn you it is not light reading and a level of knowledge of stocks is neccasary. Maybe someone will edit that as well making it easier for the novice investor.
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on 24 September 2006
With more than one million copies sold and an endorsement on the cover by Warren Buffet, you know there has to be something to this book- and I think I know why. Simply because it is the first book ever to describe the emotional framework and analytical tools necessary for financial success for individual investors.

Probably the single best book on investing written for the lay-public and the stock market bible since its first appearance in 1949, it's a great resource, although it's quite a thick book and filled with detail- and probably not for anybody but the serious stock market investor. And if getting motivated to start investing is your problem, suggest The Sixty-Second Motivator. Good luck!
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on 29 October 2012
i would acually give this 700 page tome 4 and a half stars, but there isnt a button for that.

this book is a very useable, inspiring and thought provoking investment guide. it was produced out of half a centuarys worth of trial, error and sucess by an unquestionably cleaver man. should someone interested in stocks read it? yes, proably.

for a book claiming to be for the 'layman' this book doesent give some of its secrets up easily. now im not an idiot (ha ha) but there were places in the book where i was reading the words but could come up with no meaning for the sentences. but i found it got easier to understand as i went on, perhaps it just takes a while to get used to grahams style. some, but not all, of the tables have been described by other reviewers a 'user unfriendly'. i wouldnt disagree.

enough of the bad, whats good?
graham really knew how to asses the financial health of a buisness and how to calculate its value. his 'value' and 'margin of safty' ideas are common sence writ large. his phlegmatic approach helps the investor to keep an even keel whilst navigating the stormy seas of the stock markets waves of irration optimism and pessimism.

some reviewers have criticised jason zwiegs footnotes and chapter summeries, but for me they were exelent and nessary. i can only guess that critics object to having new text interpolated in to what they, understandably, consider to be a perfect and complet work. but zweig helps to make to book more current and fills in a few areas where graham gave a less than satisfactory explination.

also one last thing, warren buffets little story at the end is brilliantly amusing and also very encouraging.

in sum, this book is full of gold; but be perpared to dig for it.
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on 4 June 2009
I totally agree with one of the other reviews on this page. Graham's bits are outstanding, but the book overall is ruined by Jason Zweig's commentaries. I realise some may argue that I should just skip those, however it means you spend all of your time skipping chapters and reading half-filled pages that are padded out with loads of footnotes.

I eventually gave my copy to a charity shop and bought the original 1949 edition and really enjoyed it. It's just shame that you can't get the later edition in its original format.

One advantage the original book has is - for those that like firm guidelines - it sets out example criteria for picking stocks and is a far more practical version. The downside is there are chapters on bonds that no longer relevant.
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on 4 June 2004
What can you say about such a classic? Everyone who takes investing seriously should read this book. After that, you will probably convinced that Graham's method is the only serious and logical approach to investing. And this book is the best way to learn this approach, beacuse Graham explains his principles in a very clear way (although the examples are a little outdated, of course) and what's better than to learn directly from the master himself? Another small recommendation to this book is the fortune Warren Buffett build by applying the philosophy described in it.
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on 7 June 2007
Most investors seem to have heard of this book - many refer to it as the bible of value investing. I think that the esteem that it is held in is probably counter productive (Barton Biggs, hedge fund manager, talks about being asked to read and annotate it twice as a young man), but what impressed me is that it is a very simple readable book that explains how to invest long term, to maximise wealth.

I don't think that Zweig's commentary adds much - I would pay more for a version with it excised - it provides interesting detail on what Graham may have considered important which is great, but it also provides a lot of anecdotal evidence which could be misleading. It also triples the length and provides a lot of distraction.
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on 8 February 2016
This well-respected classic takes the reader through the mechanics of buying shares in a methodical way so as to maximise gains and minimise losses. About half of this book will be of no interest to the modern British reader since it concerns such things as US bonds and US tax laws (and much of this is now out of date for the USA too). But Graham’s principles are timeless. Do proper research before buying. Buy when prices are falling. Sell when prices are rising. Don’t get swept along with market trends. Trust your own judgement. Avoid buying shares in companies that don’t pay dividends. Be wary of stock with a PE ratio of above twenty (this figure may vary a little according to circumstances).Take a long term view. If your stock is good, don’t worry about temporary price fluctuations.
In places, the book is heavy going and there are perhaps too many examples given of stocks that have done well and stocks that have not – it gets repetitive after a while. As mentioned, large sections of the book are irrelevant to the modern British reader. But overall, this book remains essential reading for anyone who wishes to invest wisely and make a respectable amount of money slowly.
Warren Buffet was a student of Benjamin Graham, and his success as an intelligent investor is legendary. If you want to be a day trader, this book is perhaps not for you, although much of the advice may be relevant.
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