The Intelligent Investor - Benjamin Graham

 By far the best book on investing ever written. - Warren Buffett.

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. - Warren Buffett.

Graham core principles, which are at least as valid today as they were during his lifetime: A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.

The Market is a pendulum that forever swings between unsustainable optimism and unjustified pessimism. The intelligent investor is realistic who sells to optimists and buys from pessimists. The future value of every investment is a function of its present price. The higher the price you pay, the lower your return will be.

- No matter, how careful you are, the one risk no investor can ever eliminate is a risk of being wrong. - The secret to your financial success is inside yourself. Those who do not remember the past are condemned to repeat it.

To invest intelligently in securities one should be fore-armed with adequate knowledge of how the various types of bonds and stocks have actually behaved under varying conditions.

The one principle that applies to nearly all those so-called 'technical approaches' is that one should buy because a stock or the market has gone up and one should sell because it has declined.

The defensive investor will place his chief emphasis on the avoidance of serious mistakes or losses, freedom from effort, annoyance, and the need from making frequent decisions. An enterprising investor could expect a worthwhile reward for his extra skills and effort in the form of a better average return than that realized by passive investors. If you have built castles in the air, your work need not be lost; that is where they should be. Now put the foundations under. - Henry David Thoreau.

Once you lose 95% of your money, you have to gain 1900% just to get back to where you started. Taking a foolish risk can put you so deep in the hole that it's virtually impossible to get out. An intelligent investor means being patient, disciplined, and eager to learn.

An intelligent investor must also be able to harness your emotions and think of yourself. Being an intelligent investor is more a matter of "character" than of the "brain" "We could calculate the motions of heavenly bodies, but not the madness of the people."

If you've failed at investing so far, it's not because you're stupid. You haven't developed the emotional discipline that successful investing requires. "Obvious prospects for physical growth in a business do not translate into obvious profits for investors."

The stock becomes riskier, not less, as their prices rise and less risky, not more as their prices fall.

An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. operations not meeting these requirements are speculative.

The distinction between investment and speculation in common stocks has always been a useful one and its disappearance is a cause of concern.

There is intelligent speculation as there is intelligent investing, Speculation is fascinating and it can be a lot of fun while you are ahead of the game.

The interest and principal payments on good bonds are much better protected and therefore more certain than dividends and price appreciation on stocks.

Aggressive investors may buy other types of common stocks, but they should be on a definitely attractive basis as established by intelligent analysis.

Enterprising investors start with a clear conception as to which courses of action offer reasonable chances of success and which do not.

Even "small investors" -- Perish the term! -- Sometimes try their unskilled hand at short selling.

To enjoy a reasonable chance for continued better than average results, the investor must follow policies that are inherently sound and promising, and not popular on wall street.

Common stock may be undervalued because of lack of interest or unjustified popular prejudice.

Any Intelligent person, with a good head for figures, should have a veritable picnic on wall street, battering off other people's foolishness.

All of the human unhappiness comes from one single thing: not knowing how to remain at rest in the room. -Blaise Pascal.

Investors judge "the market price by established standards of value", while speculators "base their standards of value upon the market price".

Invest only if you would be comfortable owning a stock even if you had no way of knowing its daily share prices.

Like casino gambling or betting on the horses, speculating in the market can be exciting or even rewarding. But it's the worst imaginable way to build your wealth.

Investing is a uniques kind of casino -One where you cannot lose in the end, so long as you play only by the rules that put the odds squarely in your favor.

People who invest make money for themselves, people who speculate make money for their brokers.

Temporary high returns, so long as your luck holds out, they work. Over time, they will get you killed.

"The stock market for the Next hundreds of Years" - many of its customers could barely hold on to a stock for hundred hours.

Cynic "Knows the price of everything and the value of nothing" -- Oscar Wilde

A single half-baked opinion on price could double a company's stock even as its value went entirely unexamined.

Stocks do well or poorly in the future because the businessman behind them do well or poorly - nothing more or nothing less.

Never mingle the money in your speculative account with what's in your investment accounts.

Never allow your speculative thinking to spill over into your investing activities.

Never put more than 10% of your assets into your mad money account, no matter what happens.

Common stocks may do better in the future than in the past, but they are far from certain to do so.

In the economic cycles of the past, good business was accompanied by a rising prices level and poor business by falling prices.

Twenty years ago, it took two people to carry ten dollars' worth of groceries. Today, a five-year-old can do it. - Henny Youngman.