My Thoughts on “The Intelligent Investor” by Benjamin Graham

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“The intelligent investor is a realist who sells to optimists and buys from pessimists.”

Benjamin Graham, The Intelligent Investor

This book was definitely eye-opening. As one of my first books on the subject of investing It was extremely inspiring. Though the book is more applicable to the market conditions of the 1950s, I believe there still is much value to be gleaned from its ideas.

1. The Intelligent Investor goes over general techniques of how to invest. One I would specifically like to highlight would be the idea of investing in a black and white manor. To be honest I do not specifically remember if the book actually referred to these techniques in the way I reference them, but this is my own thought process and how I visualized Graham’s writings. But in essence the concept is that the market is a fully vibrant colourful arena filled with emotion, desire, greed and speculation. Graham highlights how it is part of the human condition to feel these sensations when investing. Though it may be natural to feel and act on these perceptions, it is not how you win in the market. His belief is that the investor should be purely rational and not dilly-dally in the desires of the common speculator. Graham’s core concept is to be the one-dimensional grayscale thinking investor in a world full of four dimensional vibrant and colourful feeling speculators.

2. This idea really resonates with me, in a financial world full of pump&dumps, hype stocks, and obscure crypto scams; the amount of speculators in the world is higher than any time in history, and growing in number every day. The only solution to this problem is to stay out of it. To keep grounded in an investing strategy, and stick to it throughout. Graham’s antithesis between the thinker and the feeler, proves that people will never truly be able to predict the desires of others; especially in a vast market full of unique people.

3. To be completely transparent, this was the concept I most appreciated in the book. There was lots of ideas on how to form a portfolio, what type of stocks to buy and how to buy. While I did mostly enjoy those topics, I think most of them are less applicable today than they were in 1951. I mean obviously there are more concepts that have stood the test of time, such as doing much analysis on stocks before buying, and buy low sell dear. Though these are good perspectives, I have heard them many times and to me they do not offer much value to truly build a portfolio off of. But Graham’s idea of being this unmovable rational rock in a storm of emotion is not believed by many. Just turn on the news and it is easy to see how the speculator mindset in rampant.

Based off of this book and a couple others I plan to build my portfolio in this fashion.

• 10 – 15 total investments
• 60% value stocks (8%+ Divided Yield)
• 35% growth stocks (mostly in the S&P 500 valuation range)
• 5% penny stocks/promising IPOs
• Portfolio should be almost completely bought during a bear market
• Buy never thinking about to selling before the next 10 years (doesn’t mean be ignorant)
• A diverse selection of stocks from different sectors

Overall this was a great book and extremely formative in my investing beliefs. I would recommend this book to anyone interested and hope it builds a good understanding in how to not get swept up in the excitement of investing.

AI artwork showing the 50s New York Stock Exchange