The Intelligent investor

The Intelligent investor is one of the most important and pioneer book in the stock market industry. The book was written in 1949 with various editions till late 1971-72. The book is 640 pages long and is filled with a lot of data about the stock market from the previous crash of 1918. The book’s sole motive is to provide a fair idea to people about the difference between speculating and investing. “Any investment that does not guarantee a return is not an investment in the first place” is my mantra and this book talks on the same lines. The book emphasizes on long-term investment and the compounding effect of time. The ideas of the book will surely have a lasting impact on the reader’s mindset and approach towards investing. I have never seen a person who has finished the book and is not influenced by the idea of the Benjamin Graham value investing, about which we’ll talk about in a minute. Benjamin Graham in the beginning pages has clearly mentioned that the book is not going to provide any techniques to start investing, rather it will try to provide an investing philosophy to stick on to when you get into the stock market. The entire book is set up in such a way that it talks about investing in a certain way. That certain way is called ‘value investing’. The concept of ‘value investing’ is more on the lines of ‘easier said than done’. The conceptseems very simple but to apply it in the real world it takes a lot of patience, perseverance and persistence. However, the book definitely is able to put across this philosophy in a very candid manner. The reader will understand the philosophy portrayed in the book with much ease. When I read the book, I was a newbie to the world of stock market investing. However, I was able to understand the concepts and ideologies pretty easily. The book has made sure that I never trade in the stock market as it is nothing but a gamble. Warren Buffet, world’s best stock market investor says that his entire portfolio of stocks was built on the principles of this book. In the recent edition, Warren Buffet has given his entire fortune’s credit to this book which speaks volumes about the credibility of the principles in this book. To talk about ‘value investing’, it is much more than buying at a lower price and selling at a higher price. Value investing is valuing the business in the right way using the right parameters to come to a conclusion that the business is undervalued on the market and it will surely go up in the future with certainty. When this is done over and over again you get better at value investing which in turn creates wealth for you. (Throughout the book you will find yourself asking how do I do what this guy is speaking about?) Investing in the business will only be considered value investing when you are certain that the value of the business is much higher than shown in the market price of the share. The major challenge that comes to readers is that how do you find the worth of a business. What parameters to look at? Is all of it instincts? Or is there a science behind choosing a right business? This book fails to answer these questions. But, I believe that this book helps you ask the right question. The most important aspect of getting the right answer is to ask the right questions. Once you are on the track of asking the right question you will stumble upon the right answer sooner or later. This book will surely give you the curiosity to go out find more about value investing and ways to apply it. However, this book fails to deliver any techniques on them. There are tons of YouTube videos and books available on techniques to value investing. There are step by step procedures to find out the worth of individual companies. Final Verdict - 1. Is it a must read? -Yes.2.Will it teach me something Invaluable? -Yes.3. is the book interesting? -No, it is quite boring after a point. 4. Read this as if you studied a boring subject in your school - unwillingly but you did it anyway because you knew it was important! I must tell you it is one of the most important topics of your l