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Benjamin Graham – THE INTELLIGENT INVESTOR : The Definitive Book On Value Investing
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THE INTELLIGENT INVESTOR : The Definitive Book On Value Investing

Benjamin Graham
WELL USED, PAPERBACK

RM30.00

The Classic Bible With Timeless Wisdom On Value Investing

Remarks Free Cover-Pages Wrapping
Minor Defect
ISBN 9780060555665
Book Condition WELL USED
Format PAPERBACK
Publisher HarperCollins Publishers
Publication Date 23 Oct 2003
Pages 640
Weight 0.56 kg
Dimension 20.5 × 13.5 × 4 cm
Retail Price RM96.95
Availability: Out of stock

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★★ THE #1 INTERNATIONAL BESTSELLER ★★

★★ More Than 1.5 Million Copies Sold ★★
 
While physicist Sir Isaac Newton is widely viewed as the leading authority on gravity and motion, economist Benjamin Graham, best known for his book The Intelligent Investor, is lauded as a top guru of finance and investment. Known as the father of value investing, The Intelligent Investor: The Definitive Book on Value Investing is considered one of the most important books on the topic. By evaluating companies with surgical precision, Graham excelled at making money in the stock market without taking big risks.
 
One of Graham’s key contributions was to point out the irrationality and group-think that was often rampant in the stock market. Thus, according to Graham, investors should always aim to profit from the whims of the stock market, rather than participate in it. His principles of investing safely and successfully continue to influence investors today.
 
This classic text is annotated to update Graham’s timeless wisdom for today’s market conditions… The greatest investment advisor of the twentieth century, Benjamin Graham, taught and inspired people worldwide.
 
Graham’s philosophy of “value investing”—which shields investors from substantial error and teaches them to develop long-term strategies—has made The Intelligent Investor the stock market bible ever since its original publication in 1949. Over the years, market developments have proven the wisdom of Graham’s strategies.
 
Value investing is deriving the intrinsic value of a common stock independent of its market price. Analyzing a company’s assets, earnings, and dividend payouts can help identify the intrinsic value of a stock, which can then be compared to its market price. If the intrinsic value is more than the market value—in other words, the stock is undervalued in the market—the investor should buy and hold until a mean reversion occurs. The mean reversion theory holds that over time, the market price and the intrinsic price will converge. At this point, the stock price will reflect its true value.
 
When an investor buys a stock at a price less than its intrinsic value, they are essentially purchasing it at a discount. Once the stock is actually trading at its intrinsic value, they should sell.


While preserving the integrity of Graham’s original text, this revised edition includes updated commentary by noted financial journalist Jason Zweig, whose perspective incorporates the realities of today’s market, draws parallels between Graham’s examples and today’s financial headlines, and gives readers a more thorough understanding of how to apply Graham’s principles.
 
Graham details 6 key principles of “intelligent investing”:
● Know the business you’re investing in.
● Know who runs the business.
● Invest for profits over time, not for quick buy-and-sell transaction profits.
● Choose investments for their fundamental value, not their popularity.
● Always invest with a margin of safety.
● Have confidence in your own analysis and observations.
 
Graham writes that he aims to produce a book for laymen, non-experts, a book that will guide them in adopting and executing an investment policy. IIt is not a book about analyzing securities, it is about investing at a more abstract level (although he will reference securities occasionally to make a point). And, he proposes to explore the historical patterns of financial markets.
 
As Graham says, if you plan to invest intelligently, you must know how various bonds and stocks have behaved in different conditions over the years.
 
The second topic compares investors and speculators (also called traders by Graham). Of the speculators, he dismissingly says, “In our own stock-market experience and observation, extending over 50 years, we have not known a single person who has consistently or lastingly made money by thus ‘following the market.’ We do not hesitate to declare that this approach is as fallacious as it is popular.”
 
He also takes on the notion that dollar-cost averaging is a sure way to riches, pointing to a famous investor and businessman of the 1920s whose advice to do so turned out to be very wrong after the passage of 20 years.
 
Overall, Graham is making the point that there are no free passes, that investors must not only know about stocks and bonds, but must understand how they have acted and interacted over the years. It’s an interesting point when considered from a 2018 perspective: the bull market has gone well past its typical five- to seven-year span, and bonds have almost disappeared from the radar of most investors.
 
One further point, in the first pages of the introduction he warns readers that his is not a book about making a million dollars. Winding up the chapter, he further elaborates on his goals for the book.

◆ The first One involves helping readers avoid serious mistakes and to create policies with which they will be comfortable.

◆ A second involves encouraging readers to measure or quantify the “habit of relating what is paid to what is being offered is an invaluable trait in investment.”

◆ Third, Graham says he will offer a “positive program for common-stock investment,” with recommendations for both defensive and enterprising investors.

◆ And then there’s the matter of beating the averages by being clever.
 
In discussing this, Graham aims his criticism at those who think just a little bit of extra knowledge, combined with a representative list of securities, will make them better than average investors. He notes the number of smart people who try this and fail is surprisingly large. Instead, just create a simple portfolio policy–high-grade bonds plus a diversified list of leading common stocks.
 
About The Intelligent Investor, legendary investor Warren Buffett, who Graham famously mentored, described it as “by far the best book on investing ever written.” In fact, after reading it at age 19, Buffett enrolled in Columbia Business School in order to study under Graham, with whom he developed a lifelong friendship. He later worked for Graham at his investment company, the Graham-Newman Corporation, until Graham retired.
 
Graham’s students all eventually developed their own strategies and philosophies, but they all shared the main principle of creating a margin of safety. In general, Buffett follows the principles of value investing, which looks for securities whose prices are unjustifiably low based on their intrinsic worth. Buffett also considers company performance, company debt, profit margins, whether companies are public, how reliant they are on commodities, and how cheap they are.
 
Buffett’s strategy differs from Graham’s in that he stresses the importance of a business’s quality, and he preaches the virtue of holding stocks for the long haul. Buffett doesn’t seek capital gain. Rather, his goal is ownership in quality companies that are extremely capable of generating earnings; Buffett is not concerned that the stock market ever recognizes a company’s value. Even so, Buffett said that no one ever lost money by following Graham’s methods.
 
In a nutshell, The Intelligent Investor is widely considered to be the definitive text on value investing. According to Graham, investors should analyze a company’s financial reports and its operations but ignore the market noise. The whims of investors—their greed and fear—are what creates this noise and fuels daily market sentiments.
 
Most importantly, investors should look for price-value discrepancies—when the market price of a stock is less than its intrinsic value. When these opportunities are identified, investors should make a purchase. Once the market price and the intrinsic value are aligned, investors should sell.
 
The Intelligent Investor also advises investors to hold a portfolio of 50% stocks and 50% bonds or cash, to be the pitfalls of day trading, to take advantage of market fluctuations and market volatility, to avoid buying stocks simply when they are fashionable, and to look out for ways that companies may be manipulating their accounting methods in order to inflate their EPS value.
 
Finally, Graham looks back on his 57 years in the investment industry. While all sorts of unexpected good news and bad news came and went, “it remained true that sound investment principles produced generally sound results. We must act on the assumption they will continue to do so.”
 
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Amazon.com Review
 
Among the library of investment books promising no-fail strategies for riches, Benjamin Graham’s classic, The Intelligent Investor, offers no guarantees or gimmicks but overflows with the wisdom at the core of all good portfolio management.
 
The hallmark of Graham’s philosophy is not profit maximization but loss minimization.
 
In this respect, The Intelligent Investor is a book for true investors, not speculators or day traders. He provides, “in a form suitable for the laymen, guidance in adoption and execution of an investment policy”. This policy is inherently for the longer term and requires a commitment of effort.
 
Where the speculator follows market trends, the investor uses discipline, research, and his analytical ability to make unpopular but sound investments in bargains relative to current asset value. Graham coaches the investor to develop a rational plan for buying stocks and bonds, and he argues that this plan must be a bulwark against emotional behavior that will always be tempting during abrupt bull and bear markets.
 
Since it was first published in 1949, Graham’s investment guide has sold over a million copies and has been praised by such luminaries as Warren E. Buffet as “the best book on investing ever written.”
 
These accolades are well deserved. In its new form- with commentary on each chapter and extensive footnotes prepared by senior Money editor, Jason Zweig -the classic is now updated in light of changes in investment vehicles and market activities since 1972.
 
What remains is a better book. Graham’s sage advice, analytical guides, and cautionary tales are still valid for the contemporary investor, and Zweig’s commentaries demonstrate the relevance of Graham’s principles in light of 1990s and early twenty-first century market trends.
 
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About the Author
 
Benjamin Graham (1894-1976), the father of value investing, has been an inspiration for many of today’s most successful businesspeople. He is also the author of Securities Analysis and The Interpretation of Financial Statements.

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