The Intelligent Investor

The Intelligent Investor

Author: Benjamin Graham (1949, revised 1973). Updated commentary by Jason Zweig (2003). Preface by Warren E. Buffett.

Opening

In 1929, Benjamin Graham was thirty-five years old and running one of the most respected investment partnerships on Wall Street. His clients were rich. He was richer. Then the market crashed, and crashed again in 1930, and again in 1931. By the bottom, his partnership had lost about seventy percent of its capital. The man who would later be called the father of value investing had personally watched a decade of compounding evaporate inside thirty-six months.

Most people who lose that much never come back. Graham came back. He spent the next two years rebuilding the partnership without taking a salary, made his investors whole by 1935, and then went on to compound their money at roughly twenty percent a year for the next two decades. Along the way he wrote two books. The first, Security Analysis, became the textbook of the profession. The second, the one you are about to read, is the only investment book he wrote for ordinary people. He called it The Intelligent Investor. Warren Buffett, who took Graham's class at Columbia in 1950 and went to work for him five years later, has called it "by far the best book about investing ever written."

The reason it has survived seventy-five years while almost every other investment book is forgotten is simple. Graham did not try to predict the market. He tried to teach you how to behave when the market behaves badly. Stocks crash. Manias come and go. Hot industries turn cold. None of that has changed since 1949 and none of it is going to change. What Graham gives you is the temperament to survive all of it without panicking, without chasing, and without doing anything stupid with the money you have managed to save.