The Intelligent Investor

Benjamin Graham's The Intelligent Investor, first published in 1949, is a guide for ordinary people who put money into stocks and bonds. Graham says it is less about the technique of analysing securities than about investment principles and investors' attitudes. He separates investment from speculation and describes two kinds of investor: the defensive one, who wants safety and little effort, and the enterprising one, who is willing to give time and care. He sets out a policy for each. Its best-known ideas are Mr. Market, the moody business partner who names a new price every day, and the margin of safety, which Graham calls the central concept of investment.

The book has twenty chapters and a postscript. The early chapters deal with investment and speculation, inflation, market history and the split between bonds and stocks. The middle chapters cover market fluctuations, investment funds, advisers and how to read a company's figures. The later ones give rules for choosing stocks and comparisons of real companies, and end with the margin of safety. This summary follows Graham's own text in the fourth revised edition (1973), the last he wrote, as reprinted in the 2003 revised edition. Jason Zweig's commentary and footnotes in that edition are not covered, and all quotes are Graham's.

Note: the book is from 1973. Markets, investment products, taxes and rules have changed a great deal since then, and the figures and rules here are Graham's, for his time. This summary reports Graham's ideas; it is not personal financial advice. The Dari quotes are our own translation of Graham's English.