Published in · 5 min read · Mar 1, 2023
Are you tired of hearing the same old advice about reading “The Intelligent Investor”? Well, buckle up my dear readers, because I’m about to give you some classic reasons why this classic book is still worth your time (and money, of course). Sure, you might be thinking,
“But it was written in the 1940s! What could it possibly have to offer me now?”
Fear not, because the principles outlined in this book are just as relevant today as they were back then. So grab a cup of coffee, sit back, and let me convince you why reading “The Intelligent Investor” is still worth it.
Let’s dive in!
1. It’s a classic for a reason:
There’s an oldie but a goodie that’s still rocking the world of finance: “The Intelligent Investor” by Benjamin Graham. Yup, you heard that right, the book was written way back in 1949, but it’s still considered a classic in the world of investing.
Think of it like your grandma’s secret recipe for the world’s best apple pie. It’s been around for ages, but it still tastes just as good today as it did back then. And just like that secret recipe, “The Intelligent Investor” has stood the test of time.
Even with all the fancy new investing tools and technologies we have today, this book is still considered a must-read for anyone interested in the stock market. It’s like the OG of investing books — the original gangster.
Warren Buffett, one of the greatest investors of all time, swears by it. He’s quoted saying, “To invest successfully over a lifetime does not require a stratospheric IQ, unusual business insights, or inside information. What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding that framework. This book precisely and clearly prescribes the proper framework.”
And if that’s not enough, John Bogle, the founder of Vanguard and pioneer of index funds, also gives it a thumbs up. He once said, “The Intelligent Investor is the best book ever written for the stockholder.” High praise indeed!
2. It teaches timeless principles:
The principles outlined in the book are as timeless as a good pair of jeans. Sure, the stock market has changed over the years, but investing in companies with solid financials and a margin of safety is like wearing a helmet on a rollercoaster — it may not look cool, but it’s definitely the smart move.
And let’s not forget about the great examples provided by Graham himself. He famously used the allegory of Mr. Market to explain market fluctuations and irrational behavior. It’s like having a wacky uncle who always acts erratically — you love him, but you don’t take his investment advice.
Plus, “The Intelligent Investor” has been endorsed by some of the biggest names in investing. Warren Buffett, the Oracle of Omaha himself, has called it the best book on investing ever written. If that doesn’t convince you, I don’t know what will.
3. It’s accessible for beginners:
Investing can seem like a foreign language, but “The Intelligent Investor” speaks beginner fluently. Benjamin Graham’s classic investment guide is accessible to everyone, no matter how little you know about the stock market.
Graham avoids using complicated jargon and financial lingo, instead opting for simple, easy-to-understand language that anyone can grasp.
For example, Graham compares investing to buying groceries, stating that just like you would carefully select your groceries based on price and quality, you should carefully select your stocks based on their value and potential for growth.
4. Learn about different investment options:
Investors frequently find themselves hopping on the newest trend in investments in today’s fast-paced world without fully appreciating the possible risks and benefits.
By highlighting the significance of making well-informed financial decisions, “The Intelligent Investor” contributes to reversing this tendency. The book gives readers a strong basis for creating a diverse investment portfolio by demonstrating how to assess investment possibilities in accordance with their financial objectives and risk tolerance.
For example, when it comes to stocks, Graham advises investors to look for companies with a strong financial foundation, stable earnings, and a good dividend payout.
Similarly, when it comes to bonds, Graham emphasizes the importance of understanding interest rates and credit ratings. He explains how investing in high-quality bonds with a low risk of default can provide steady income and help balance out the risk in a portfolio.
Finally, Graham also delves into the world of mutual funds and explains how they can be a great option for investors who want to diversify their portfolios without having to pick individual stocks. He provides advice on choosing the right fund based on factors such as the fund manager’s track record, fees, some golden ratios, and investment strategy.
5. Emotional discipline while investing:
Investing can be an emotional rollercoaster ride, and it’s easy to get caught up in the moment and make hasty decisions. That’s where “The Intelligent Investor” comes in, teaching readers the importance of emotional discipline.
For instance, the fear of missing out (FOMO) can make investors jump on the bandwagon of a hot stock without proper research, while the fear of losing money can cause them to sell stocks during a market dip. This can result in significant financial losses.
For example, during the pandemic, many investors panicked and sold their stocks during the market downturn in early 2020. However, those who remained emotionally disciplined and followed their investment plans eventually saw their portfolios recover and even thrive as the market rebounded.
My friend made crazy returns on Adani Stocks but anyways let’s not get carried away with ‘Adani Stocks’, perhaps not the best time, haha!
If you were skeptical about reading “The Intelligent Investor” before, I hope this article has convinced you otherwise. This book is a timeless classic that still holds valuable lessons for investors of all levels.
Remember, investing is not just about making quick gains but about building a solid financial foundation for your future. So go ahead, grab a copy, pour yourself a cup of coffee, and start reading. Your financial future will thank you for it.
And remember, as the legend investor Warren Buffet once said once said, “Price is what you pay. Value is what you get.”
