THE INTELLIGENT INVESTOR BY BENJAMIN GRAHAM SUMMARY

-

Benjamin Graham was one of the greatest practical investment thinkers of all time. After his widowed mother lost all of their money in the financial crash of 1907, his family fell into poverty. Yet, Graham turned this around. Studying at Columbia University, he went on to work at Wall Street, going from clerk to analyst to partner before running his own investment partnership. Consequently, he amassed a wealth of historical and psychological knowledge concerning the financial markets, that spanned several decades. And he shared that knowledge in his book, The Intelligent Investor.

In ‘The Intelligent Investor,’ little time is spent discussing the technique of analyzing securities. Instead, great focus is placed on investment principles and investors’ attitudes. Although ‘The Intelligent Investor’ was first published in 1949, the underlying principles of good investment do not change from decade to decade. Consequently, in ‘The Intelligent Investor,’ Benjamin Graham aims to teach us three things: 

1. How to minimize the chances of suffering irreversible losses. 

2. How to maximize the chance of achieving sustainable wins. 

3. How to overcome self-defeating modes of thought that often prevent investors from reaching their full potential.


To be an intelligent investor, you must be patient, disciplined, and eager to learn new things. You must also be able to control your emotions and to think for yourself. Graham states that the intelligence needed to be a good investor has much more to do with character than it does IQ. Throughout this ‘The Intelligent Investor’ summary, we shall explore some of the key investment takeaways, and the Benjamin Graham formula for smart, successful investing.


AUTHOR
ANKIT VERMA
ASSITANT PROFESSOR

Comments

Post a Comment

Popular posts from this blog

The Alchemy of Finance George Soros By George Soros

-
Image
Part 1: Theory  The first part of the book is divided into several chapters where the theory of reflexivity is explained in great detail. The concepts can certainly be hard to grasp for the beginner, but since Soros explains everything with real-time examples with his own experience, it makes it a little easier. Soros also states that since the stock market meets all the criteria of a perfect competition, he chose it to develop his theory of reflexivity.  At this point, Soros explores the concept of equilibrium and argues that it’s a misconception when it comes to the stock market. Once can observe several fluctuations in the market and since the underlying conditions are also changing constantly, especially when it’s supposed to be reflecting the changes in the market, it’s a little difficult to show a firm relationship between the two.  Soros further explains that theories can be divided into technical and fundamental theory. While the technical theory is almost useless...
Read more

THE MILLIONAIRE NEXT DOOR BY THOMAS J STANLEY SUMMARY

-
Image
THE BIG TAKEAWAYS: 1. Not every millionaire just throws their money away.  i. If Many millionaires maintain their status through careful maintenance of their money.  2. An authentic millionaire believes that being able to live freely has more power than everyone knowing how much money they have.  i. It’s a common misconception that millionaires love to flaunt their wealth, whereas many true millionaires appreciate their financial freedom over the material things.  3. Millionaires know where their money is worth the most.  i. Smart buying and smart investment are a skillset many millionaires possess.  4. Millionaires give their kids what they want, even if it poses a threat to their future.  i. It is not uncommon for millionaires to support their children into adulthood, where it becomes more hurtful than helpful.  5. The children who achieve more understanding of the way money works in the real world tend to receive more money from their parents....
Read more