We don’t invest but speculate most of the time says the author, by that he means we expect quick profit not paying heed to the risk associated with it, to invest is to have your principal secured with adequate return on investment over long period of time.
To successfully invest in stock one should not get carried away by the markets bull , buying when high or bearish, selling when low, rather he should do the opposite and have faith in himself .
The allocation of portfolio between bonds and stocks should be balanced in such a way that impact of inflation is negligible.
The author says most investors are defensive in nature for they want freedom from bothering and spend less effort to earn quick, but he also has solution for them, he can allocate their portfolio on autopilot meaning letting their investment done by a good fund house.
To the enterprising investor who wants to be part of decision on investing, he outlines various successful ways to pick a stock, like size of the company, it’s financial strength, dividends they paid, price to earnings ratio, price to asset value etc..to make their choice of stock/bonds a good one.
The other security instruments like convertibles and stock options their relevance is illustrated beautifully.
The Intelligent investor indeed are the ones who do not speculate rather invest, do not become defensive rather enterprising, do not short sell rather hold their portfolio irrespective of the market conditions.
To write a book with such authority and relevance on subject as speculative as “Investing In Securities” should be commendable.
ABOUT THE AUTHOR: BENJAMIN GRAHAM(1894-1976), also the author of Security Analysis and The Interpretation of Financial Statements.
Jason Zweig, writer at Money Magazine and columnist at TIME.
Preface and Appendixes by Warren E. Buffet.
PUBLISHER: HARPER COLLINS