The Intelligent Investor - Third Edition

Benjamin Graham

Benjamin Graham was an extraordinary individual. His father died when young Ben was nine years old. He and his two brothers then grew up in poverty with just their mother. Thanks to his hard work and diligence, Graham managed to get into Columbia University. When he graduated in 1914, he received offers from three different departments at the university to work for them. These were the English, philosophy, and mathematics departments. This demonstrates the breadth of his scope and talent. By that time, Graham was already translating poetry from and into French, writing his own sonnets, and studying the books of ancient philosophers in their original Greek and Latin. He won national awards for his literary works. And as if that wasn't enough, he won the same national awards in mathematics competitions. However, Graham rejected an academic career and went to work on Wall Street. Without any education in economics or finance, he soon became not only a successful investor and portfolio manager but also a leading theorist. While many things written in finance often sound rather foolish after a few months or even weeks, Graham's principles, published many decades ago, seem to gain even more strength and truth over time.
Two of his books stand head and shoulders above others—Security Analysis and The Intelligent Investor. The first lays the foundation for investment analysis as a field, while the second provides the reader with a guide on how to proceed when investing in stocks and bonds. The Intelligent Investor is by far the best book ever written on investing. It is one of the most widely read publications of its kind, but also, paradoxically, perhaps the most ignored in practice. Such is human nature. We try to make simple things complicated.