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| The Intelligent Investor: The Definitive Book on Value Investing. A Book of Practical Counsel (Revised Edition) | 
 enlarge | Authors: Benjamin Graham, Jason Zweig
Creator: Warren E. Buffett
Publisher: Collins Business
Category: Book
List Price: $19.95
Buy New: $9.65
You Save: $10.30 (52%)
Buy New/Used/Collectible from $9.65
Avg. Customer Rating:  (133 reviews)
Sales Rank: 368
Languages: English (Original Language), English (Unknown), English (Published)
Media: Paperback
Edition: Revised
Number Of Items: 1
Pages: 640
Shipping Weight (lbs): 1.1
Dimensions (in): 7.7 x 5.3 x 1.6
ISBN: 0060555661
Dewey Decimal Number: 332.678
EAN: 9780060555665
ASIN: 0060555661
Publication Date: July 1, 2003
Release Date: July 8, 2003
Availability: Usually ships in 1-2 business days
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| Customer Reviews:
 Worth it! October 16, 2008
1 out of 1 found this review helpful
I am currently reading the book. As the title says the suggestions are really for the intelligent investor, suited for the enterprising as well as the long term investor. I would recommend this book to anyone who has no background in investing and is interested in doing so in the near future.
 Warren Buffett's Bible! October 11, 2008
2 out of 2 found this review helpful
Graham's approach is aimed at minimizing the odds of irreversible losses and maximizing the chances of sustainable gains. (Many dot-com and telecom stocks lost 95% of their value by the end of 2002, requiring a 1,900% gain to get it back. That illustrates why Graham constantly emphasizes the importance of avoiding losses.) Unfortunately, Graham died over 30 years ago, and thus his material and examples are dated; the good news is that Jason Zweig provides an update for each chapter.
Familiarity with a stock (eg. one's own employer) breeds complacency that should not be allowed. The importance of diversification is illustrated by the fact that the average net worth of a 1982 Forbes 400 member was $230 million - staying on the list until 2002 required only 4.5%/year growth (less than bank accounts), but only 16% made it.
Large funds, with large amounts to invest, frequently end up owning the same large stocks (only a limited # can handle the volume), thus creating an overvalue situation.
Portfolios should be viewed over a 10-30 year investment horizon. The most lucrative sector of any given year often turns out to be among the worst performers of the following year. Buffett and graham both praise low-fee (.75% for taxable and municipal bond funds, 1.25% for small stocks, 1.5% for foreign stocks, and 1.0% for the rest) index funds a best for individual investors.
Graham believes five elements are key to determining P:E ratios: 1)Long-term prospects. (Watch out for serial acquirers" - an average of over 2-3 acquisitions/year suggests limited faith in its own opportunities. Also those relying on a small # of customers.) 2)Pluses include a strong brand identity (eg. Harley-Davidson), economies of scale, resistance to substitution (eg. electricity). 3)Consider the potential flood of newly exercised shares via options. 4)Rapid growth companies are vulnerable to eventual decline in their growth rates.
Accounting abuses include pro forma reports (had not . . .), book revenues early, capitalizing expenses, overly optimistic pension-fund investment returns.
Steer clear of companies with capitalization less than $2 billion, current assets < 2Xcurrent liabilities, lacking earnings for at least 10 years, failing to increase EPS at least 1/3 over the last ten years, P/E greater than 15.
Have a Margin of Safety and believe in your analysis! September 25, 2008
The Margin of Safety principle is probably the main thing to get from this book. The book gives many comparisons and instructive historical examples, but is a bit lacking in terms of actual advise on how to conduct an analysis, even though the book was supposedly aimed at the layman reader.
I would recommend browsing this book and focus mainly on the two chapters already recommended by Warren Buffett, namely the chapter about stock market fluctuations and the chapter about margin of safety. Concerning the overall philosophy of long-term investing I prefer Phil Fisher's book: Common Stocks and Uncommon profits.
In addition you will also need a proper book on valuation, although Graham does give a very simple valuation formula, I feel it is too focused on earnings (that is, the 'net income' which is often deceptive due to depreciation, new investments, etc.), and I personally prefer a proper Discounted Cash Flow model. Check my other reviews if I should one day post a review for a good book on valuation.
Best Investment Book I've Ever Read July 30, 2008
0 out of 1 found this review helpful
The Intelligent Investor has helped me focus on the long term, to really internalize what sort of returns I should expect from my stock and bond investments and to temper my enthusiasm when the market gets exciting. Graham writes clearly, uses examples that are easily understood, and makes his points in an understated style. Though a bit dated -- Ben Graham met his greater reward more than thirty years ago and Jason Zweig focuses his commentary on the internet bubble and its aftermath -- the lessons set forth remain critical to value investing today. Just buy and read (and re-read) this book!
I should have read this book before investing July 9, 2008
2 out of 2 found this review helpful
Simple like that: if you are a layman investor and don't want to lose a dime, stop your investment actions right now and start reading this book immediately.
I've started composing my stock portfolio a couple of months, before reading this book. At that time, I didn't know any of the Graham's wise lessons and took many decisions, some Graham-complying ones and some not. After six months, all bets on companies in a strong financial position, with a dividend payment history of more than 20 years, offering shares with a discount as consequence of the market fluctuation, and so on, proved to be right, even during crisis time.
A must read book for anyone aspiring to be a fraction of what a true investor is.
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