Benjamin Graham | Jason Zweig
Among the library of investment books promising no-fail strategies for riches, Benjamin Graham's classic,
The Intelligent Investor, offers no guarantees or gimmicks but overflows with the wisdom at the core of all good portfolio management.
The hallmark of Graham's philosophy is not profit maximization but loss minimization. In this respect, The Intelligent Investor is a book for true investors, not speculators or day traders. He provides, "in a form suitable for the laymen, guidance in adoption and execution of an investment policy" (1). This policy is inherently for the longer term and requires a commitment of effort. Where the speculator follows market trends, the investor uses discipline, research, and his analytical ability to make unpopular but sound investments in bargains relative to current asset value. Graham coaches the investor to develop a rational plan for buying stocks and bonds, and he argues that this plan must be a bulwark against emotional behavior that will always be tempting during abrupt bull and bear markets.
Since it was first published in 1949, Graham's investment guide has sold over a million copies and has been praised by such luminaries as Warren E. Buffet as "the best book on investing every written." These accolades are well deserved. In its new form--with commentary on each chapter and extensive footnotes prepared by senior Money editor, Jason Zweig--the classic is now updated in light of changes in investment vehicles and market activities since 1972. What remains is a better book. Graham's sage advice, analytical guides, and cautionary tales are still valid for the contemporary investor, and Zweig's commentaries demonstrate the relevance of Graham's principles in light of 1990s and early twenty-first century market trends. --Patrick O'Kelley
1 I liked Zweig
Some of the other reviewers have noted how annoying Zweig was, and that he ruined the book for them.
I disagree. Zweig acts as a cheerleader for Graham, and gives us recent examples to support Grahams ideas. This is important, because without this, it would be easy to dismiss Graham by saying "he died 30 years ago, surely I can find a more relevant book". Towards the end, I found myself skipping the Graham section and diving right in Zweig.
My recommendation: go look at a bookstore, flip to Zweig's parts (easy to find, since it's always in a different font than Graham's parts) and see if you find his writing style annoying. If so, get the Graham only hardcover version. Otherwise, you're basically getting two good books for the price of one.
2 Extremely useful
This book really changed my way of looking at stocks. Using the principles that I learned about value investing I ended up with a "25" ranking in marketocracy simulations, re-entered the market, stopped losing money in real life and actually made some money in the year and a half since I read it. I still go to it frequently and use it as an ideological reference to remain focused. The comments by Mr. Zweig are excellent and worth reading all by themselves. If this is the only book you ever read about investing in stocks you could do very well for yourself. It's ideas on defensive investing are first class. Enjoy.
3 Solid Investment Book
Not the quickest read or "investment for dummies" simplicity, but if you take the time to read through anyone can understand the basic value concepts. Tried and true, this is a classic and a must have for all value investors.
4 Not for the beginner investor
I am just a family man, struggling with a mortgage, four kids, and college tuitions. I bought this book to help myself get more insight into investing as I have received poor investment advice in the past. Honestly, the best part of this book for me was the commentary by Jason Zweig. I would often go immediately to the after chapter commentary, sometimes instead of reading the original chapter, his commentary was that good!
I keep this book by my night table, and reread sections of it, while I work on my portfolio.
5 Contemporary version of a classic
Benjamin Graham's timeless wisdom combined with Jason Zweig's modern insight in one volume. If the commentaries are annoying, they're partitioned into footnotes and separate sections that are easy enough to skip - but these are loaded with practical info, so I can't imagine why anyone would want to. A modern, easy to read version of the classic book on value investing.
6 If you will read only one book...
This book has taken me through one of the biggest crashes in market history and the following recovery over the last two years or so. Although written decades ago, Graham's ideas and his presentation is so clear, it all still makes sense. Thoughts and ideas presented in this book can be put to immediate use as you go through the book. Building the discipline to actually become the 'Intelligent Investor' might take years.
I have read this book a few times over and each time have taken away things and thoughts that summed up define what is now my investment philosophy. As Buffet said about Value investing, you will either get these concepts the first time you read them, or you will never agree with them.
7 A True Classic
One of the greatest business books of all time. A "must have" for the library of any serious long term investor/businessman. Ben Graham was Warren Buffett's mentor, and Buffett has always attributed his great success to the lessons/wisdom he learned from Graham. I cannot recommend this book highly enough.
8 The Intelligent Investor: The Definitive Book On Value Inves
Why another review of the already famous and much reviewed book ? The phrase "The definitive book ..." in the title seems like an advertising gimmick added by the publisher but I think that is not exaggerated. It is even not overstated to call it "stock market bible" (though this is also an advertising-sale blip by the publisher; Graham might not be happy with this because through out the book, his words are full of cautions and humblesness).
The book sets a clear goal at the begining and follows it thoroughly. These are Graham words: "little will be said about the technique of analyzing", "attention will be paid chiefly to investment principles and investor attitude". And that is exactly what it's about. It's a about a philosophy, an attitude rather than a guide to show one how to analyze and pick particular stocks. Those who comment that the book contains out of date ideas and examples simply do not appreciate the main theme of the book (should one say Aesop annecdotes obsolate because he said of obscure metaphors instead of phancy ones in the modern world?). And even Graham said: "the underlying principles of sound investment should not alter from decade to decade, but the application of these principle must be applied to significant changes in the financial mechanism and climate". Thus, the paricular application should change to adapt with the current economy situation (e.g, the arrival of tech and biotech, nanotech stocks; new tax and new corporate law; new analysis method e.g. beta analysis,etc...) but the principle of investing still remains (an analog: even with the discover of general relativilty of Eistein, who would say Newton's law is obsolate ?) I do not argue whether the modern efficient market theory (which is what is tought at business schools) is conflict with what the book said but rather, I want to emphasize the book investment principle.
Graham principles stand the test of time because it is full of wisdom. He carefully define what investment is: "operation is one which, upon thorough analysis promises safety of principal and an adequate return", which clearly distinguish between investors and speculators (to understand a matter deeply, one needs to understand the definition.) Can the Graham principles be proved (like a math equation e=mc^2) ? No. But, accept it like a proposition of investing. (somewhat like the proposition in relativity theory).
All said, this is a book about investment philosophy (not "how to make million" books, not "how to analyze stock" book, not how to pick stock book). The book is full of wisdom and if one understand and apply these wisdom, he or she will be better off, not only in investing but other apsect of life as well, because it's the philosophy. Wisdoms are said by wisemen, mostly old, so it's harder to appreciate by younger one unless one has experienced through the same situations.
Extra: The essay by Warren Buffet is an interesting read for lay man to illustrate the point of the book.
This is the one investment book to own if one can own only one.
9 Read the 4th Revised Edition instead
If you want to read Graham, read the 4th revised edition (1997, 368 pages) in which Graham has expressed his idea very clearly. To me, this edition (2003, 640 pages, with Jason Zweig) adds no value upon the previous one but noise.
And, I suggest you read the review titled "Classic book, but annoying commentaries" of June 30, 2004.
10 The Value Is In The Investment Philosophy
The value of this book is in the investment philosophies that Graham goes out of is way to state and restate into redundancy. As Graham states in the book, "The Intelligent Investor" focuses less on the technicalities of his analysis's, and more on the ideals behind them. These ideals include:
patience in waiting for the right opportunites to appear,
patience in ownership of a stock until it's true market value is recognized,
evaluating a company and estimating it's 'intrinsic value' (what you would pay for it)
searching for stocks that are undervalued and more.
Most of the ideas he brings up all revolve around a central theme of having a "margin of safety" in all your investments. He also states that if you don't have the traits required to stick to these ideals, you would do best to stick with an index fund for your common stock investments. This book is recommended to anyone who is looking to become a more aggressive investor since it provides a basic foundation for you to build on.
For all it's strengths, this book as well as "Securities Analysis" have a common weakness which is that the ways that Graham found 'value' investments are much more difficult to find today. Value investing has been around for half a century now and has recently been making a comeback because of the bursting of the tech bubble. As Graham also states, the more prevalent a certain approach to investing becomes, the more diluted its earnings potential becomes. Opportunities such as 'net-nets' (stocks whose market value fall below their book value) are extremely rare to find today. It is up to the reader to discern how he/she can take advantage and apply his ideas to the market today. (Which the best books usually do)
A word of note. Most value investors point to Warren Buffet as evidence of the profitability of value investing although Buffet is not a purist and places just as great an emphasis on intangible assests (such as branding and management). Opportunites, such as his 8% stake in Coca-cola would have been missed by someone strictly adhering to the Graham-Dodd model.
In short, even with its inevitable weaknesses, "The Intelligent Investor" is an important addition to the library of any person who wishes to become an aggressive investor.
11 "best book on investing ever" (Warren Buffett) ... I agree.
Zweig takes the classic book by Ben Graham (Intelligent investor, 1949 -- updated and rewritten several times) and adds lots and lots of commentary. Every other chapter is Zweig. Almost every page has a Zweig comment on something Graham says. If you are a Graham fan and CAN read his work easily (very tough for me, as he reads like Winston Churchill) you will find Zweig annoying ... but if you are moderately versed in value investing terminology but not an expert, you'll find his "translation"/commentary very helpful. Zweig also gives lots of modern examples of how with value investing, the Graham way, investors could have avoided the recent bubble burst.
12 Updated After About 30 Years
Benjamin Graham first started the whole idea of modern security analysis with the publication of the first edition of this book in 1949. He updated it several times before his death in 1976, the last time in 1972. This was the Bible of charts and graphs and using technical analysis to identify good stock values.
Now Jason Zweig, senior writer and columnist for Money Magazine has taken this classic work and updated it to what's happening in the market now. His writing style, if possible, has improved on the original work. It uses plain simple English to describe the marketplace and what's happening to it. More important it tells you what to look for to find opportunities that the rest of the market may have missed.
13 Classic book, but annoying commentaries
I was deciding between getting this edition or the more expensive hardbound edition (which does not contain the Jason Zweig commentaries). I naturally thought, why not go for the cheaper one and get the commentary for free? After all, I could just ignore the commentary if it doesn't help.
Bad bad choice. It was like choosing between a Beethoven CD and the same CD but with free shrieking commentary by a Damon Wayans movie character during and in between each symphony.
Zweig's writing when inserted between Graham's is like the annoying paperclip in MS Office, except there is no way to turn it off. He's in the footnotes (virtually every page!), he's in between every chapter. Open the book at a random page, and most likely you'll open it to a Zweig page.
The content and style of his writing feels condescending and contrasts so much with Graham's. When reading Graham you have elegant timeless prose by a humble, wise man who makes you feel he is sincerely interested in your well-being. By contrast, Zweig feels like someone who wants to impress you with his word plays, and puns. He really should have attempted to recede into the background and limited his voice.
I would recommend everyone to just buy the hardcover edition.
Buy Graham only. If you cannot read Graham, Zweig will only help marginally, and you still need to verify his comments against other contemporary Graham commentators. Get another book. If you *can* read Graham, then you do not need the commentaries in this book. Any questions you may have can be answered in thousands of sites on the net.
14 one of, if not the best, equity investment book
this is buffets' bible for good reason.
the book's central concept, the margin of safety, is reinforced time and again w/ supporting ratios and working examples, both from the 60-70s and from zweig's excellent supplements (an extremely valuable supplement to the original text, if for no other reason than to show that graham's teachings are timeless). while occasionally ratios will appear dated and no longer relevant (i.e. book value's importance has declined w/ the transition of the US eq mkt to increasing intellectual capital in a company's mkt cap), its discipline, focus and litmus tests (i.e. bond yields vs E/P ratios) still remain valid.
for the individual investor, there simply is no better book.
15 Too bad real estate was not also in Benjamin Graham's field
If you have only time to read one book on investing, this classic should probably be it. But if you recently have read some of the popular get-rich-quick books, "The Intelligent Investor" is a necessary and powerful antidote.
The author has an extremely realistic view of the investment world. He sees the real risk where speculators may imagine there are instant riches. For Benjamin Graham, safety of capital comes first. But at the same time, he makes it clear that safety is not guaranteed, even if you do have a properly selected and well balanced portfolio of stocks and bonds.
On page 25, Mr. Graham warns the reader that: "There is no certainty that a stock component will insure adequately against 'large-inflation' but it should carry more protection than the bond component." The author does recognize that: "The outright ownership of real estate has long been considered as a sound long-term investment, carrying with it a goodly amount of protection against inflation." With this statement, he seems to recognize that inclusion of real estate could make an investment portfolio stronger. But he does not analyze real estate extensively as an investment in his book because he says that it is not his field.
Too bad he did not broaden his scope and also become an expert in real estate. If income-producing real estate had been looked at as thoroughly as stocks and bonds in "The Intelligent Investor," I believe many readers, with most of their equity in real estate, would be calling Amazon.com about giving this book a sixth star.
16 A classic!
This is an excellent text for anyone who wants to learn about investing. Strongly recommended!
17 The Value Investors Bible
Anyone who chooses to comprehend this classic text will without a doubt expand their knowledge within the universe of value investment techniques. Moreover, in these times of muddled distinction between the investor and speculator, there is no better reason to buy this precious peice of Graham's intellectual genious than now. For myself, this book was truly the first necessary step to bring the perpetual pernicious chaos of what is convieniently termed speculating, to a more lucid order as I learned the true value of Graham's principles of value investing. We can all benefit to learn from this book.
18 The first and last book you need
I am amazed that things are still repeating the similiar way even decades after this book published.
This book costed me $13.97. By reading it, I can save much much more -- I think it is an great investment.
19 Edition quirks
Classic investment book. However, each chapter in this edition is followed by a chapter of commentary by a journalist. I found this annoying and would have preferred an appendix with the information. The content of those additional chapters makes for some interesting reading but doesn't sit well between Graham's original chapters, in my view.
20 The Gospel According to Ben
Years ago I read David Chilton's "The Wealthy Barber" and was instantly hooked by its accessibility and plain common sense regarding investing and financial planning. If the "The Wealthy Barber" was grade school, "The Intelligent Investor" is college. Not nearly as accessible, but so much more fulfilling and useful in everyday terms. This most recent edition ups the ante even further by including commentary from financial writer Jason Zweig, updating Graham's classic text with examples from the boom and bust of 1996-2001. Graham explains the principles of value investing clearly and with passion for his subject. As Santayana wrote, "Those who do not know history are doomed to repeat it." Graham knows his history, and provides this guidebook for how to spare yourself that doom. I enjoyed every minute of it, and learn something from it every time I pick it up.
21 First Rate
I had a recent hardcover edition from the library, but liked it enough I asked for the book for Xmas. I was glad I did, as the trade paperback edition I got for Xmas had the Zweig commentary after each chapter that my library version didn't. The commentary really helps clarify and update Graham's points (including much about the dot.commers dot.bombing). If you have the old edition with no Zweig commentary, I'd recommend getting the new edition. And if you have neither copy, get one! Buffet's afterword is priceless, too.
22 guidelines from the man who taught Warren Buffett
I had always avoided reading Graham on the assumption that he would be an uninteresting read. He is fabulous. Clear, straightforward guidelines come out in clear english. Zweig's updating is perfect - telling you when items are outdated enough to deserve skipping as well as including more up to date data. Its clear, easy to understand, and straight from the guru's mouth.
23 An Interesting Read
Graham is without doubt an intelligent man whose insights into investing are worth reading. This book, while dated in its examples, is not dated where it counts - intelligent investing philosiphies. The essay written by Mr. Buffet at the end of the book is also very informative and also enjoyable to read.
However, as always with such books there comes a caveat. Mr. Zweig's commentary through the book is not of the continuously high standard with which Graham writes. It disrupts the flow of the book and detracts from the overall experience of reading Graham's fine work. My suggestion is to ignore Zweig's commentary and footnotes until you find there is something that you don't understand or want further thoughts on. Zweig provides a few cutting insights, but only a few.
Dispite this the books value is not diminished - it's well worth your time and your money.
24 Excellent
This review is based on reading the book in one day, and so not really having time to put into practice what Graham recommends. I'm however reviewing the text and style of the book, which is superb.
Good information and analysis, the web references are invaluable, and very balanced synopsis of the past performance of the market. What I would suggest for future revisions is the updating of the market's performance since 1972, upon which the original text is based. It's somewhat disconcerting to be reading about events that occurred almost 30 years ago in the conext of today's market.
25 Tired
Although I am mostly a value investor, this has never been my favorite book. The old 1973 edition which this replaces was dated and the examples were hard to relate to today's market. Even the previous editions were not ones I particularly enjoyed. Quite frankly, the book was and is boring. Also many of the investment ideas in the book simply do not work in today's market. For example, I agree with Niederhoffer that buying companies for less that Net Current Assets is ridiculous in general. Most who claim to be successful at this are simply liars. This technique worked for a short time following and during the great depression. But that was basically it. The idea of approaching one's investments as a business is old hat now but for those not familiar with the concept this book may be worthwhile although whether it is worth buying the book for this tidbit is debatable. The Buffettology books do this just as well and are more up to date. Despite the laughter and venom directed against these books they are useful modern investment books which the budding value investor would do well to read. This update does use more modern examples but with the rise of the internet this type of information is just not as rarely available as it once was. I just wonder how many more "revisions" this book can stand before it becomes like Graham's Security Analysis. Keep in mind this is a new edition of a book by a man who has been dead for years ( and not the first one at that). The modern investor would probably be better off learning something about valuation and applying that to determine if companies are undervalued. The primitive methods in Graham are not particularly useful today and do not reflect the methods of today's successful value investor.
26 Fundamentals for All Investors
This should be required reading before anyone invests in the equity market. This book gives clear examples of how to compare the fundamental values of companies. The only thing it doesn't address is how to defend oneself against accounting misrepresentation (other than through diversifying the portfolio), but that should also be part of a fundamental analysis, especially since Sarbanes-Oxley will requre that off balance sheet transactions and off balance sheet vehicles be disclosed in financial statements.
Serious finance professionals may also want to buy a book that explains various ways corporations and banks can abuse structured finance and derivatives. I also highly recommend Janet Tavakoli?s (esp. Chapters 3 and 8) ?Collateralized Debt Obligations and Structured Finance".
27 Classic Investment Book Enhanced for Today?s Investors
When I first came across the first edition of this book in my local library in 1959, I was a teenager. Back in those days there were only a handful of books about the stock market. And I've read all of them during my junior high and high school years.
This latest updated 623-page paperback (the index alone is 33 pages) version updated by Jason Zweig is a welcome addition to this classic. The original chapters are intact, but with footnoted comments by Zweig. Moreover, he provides his own commentary on each chapter contents in a separate chapter following each original chapter. He provides extensive research, charts, tables and commentary that updates the book to the present years. He is not afraid to take on the big guns of Wall Street and show how wrong they were in some of their extremely bullish predictions during January-March 2000, when the market was at its peak.
The first nine chapters cover investing basics that all investors could benefit from. There are many truisms spouted on Wall Street that are not really true. These chapters provide the investor with a realistic picture of how Wall Street works and what investors need to do to come out ahead.
Chapters 10-20 focus strictly on fundamental analysis, stock selection, convertible issues and warrants, and other subjects. Investors who plan to invest directly in stocks should make sure to read these chapters. However, for readers more interested in investing in mutual funds, and in particular index funds, they need not concern themselves with all the detail in these chapters unless they have the time or interest in the subject matter presented.
In conclusion, the combination of pioneer Ben Graham?s original work coupled with Zweig?s meticulous and enjoyable update, make this a remarkable book about investments and investor behavior that every new and experienced investor should read. Of the 500 investing books that I?ve read, this one certainly is one of the greats of all time.
28 Book is still great, revision stunk
The book is still great, however the revision was the worst. I bought the book being as it was cheeper than the hardcover, and half the book was filled with this guy's (Jason Zweig's) insights on the reasons for the numerous tech companies bursting with the bubble. Everyone already knows what happened when the bubble burst. Its quite odvious that's all the revising author knows about securities, being as half the book was filled with comments about it. My advise, the extra money for the hardcover is worth not having to read the revisions.
29 A must read
A must read for anyone who wants to be a stock market guru. It's not that you'll become this hot stock picker, and your dreams of wealth will be answered, but you'll understand the psychology behind why the market moves in certain directions, and how to profit from those moves.
30 Good book!
This is a solid treatise on value investing. Although it may not be fully appropriate for the types of markets we are facing right now. As always Benjamin Graham has a solid approach to investing that fits a long term approach.
Right now with all of wall street's shenanigans it is hard to determine if the company's value is truly stated. Plus with derivatives taking over the marketplace it is almost impossible to just stick to one approach to investing. Especially in the short term. That is why I recommend the book "Futures For Small Speculators" in addition to this book if you want a strategy for the short term and the long term style of investing that will be necessary in the 21st century.
31 Nothing new here
Why would anyone actually spend money on something like this is my question. We've heard it all before, and our portfolios have collapsed along with everyone else's. Why does this author get a big advance when the rest of the world sees their investments fall apart? It just isn't fair!
32 Skip it
The updated commentary makes this book a more enjoyable version than previous editions. If however you are already a believer in the Grahm school of thought you might as well read Security Analysis and skip this one. Security Analysis is FAR more in depth. For those of you who do not believe in the Grahm method, this probably won't convince you. I give this book four stars simply because it qualifies as some sort of classic, as far as investment books go. And Mr. Zwieg has done a good job including more current info and examples.
33 Sound advice
This book represents all things solid and stable in the world of stock market fluctuations that can turnabout on you in a second. Graham gives good advice that helps to avoid the common errors most people make in the stock market. The only gripe is its a rather droll and dry read. But if you stick through it and finish it, you'll find yourself much wiser.
34 A worthwhile read, with relevant commentary
Graham's writing is clear, concise and level-headed. He warns against unreasonable financial expectations and proceeds to explain his theories in sufficient detail to be worthwhile, without being over the comprehension of the layman interested in investing.
The book is lengthy and "solid", as opposed to other finance books that hope to explain investment in 100-200 pages. Topics include stocks vs. bonds, inflation, security analysis, and margin of safety (Graham's analysis of the assets of a company in relation to its debt). Zweig's commentary is useful, with footnotes to clarify historical references and, occasionally, demonstrate instances where Graham's predictions proved untrue. At the end of each chapter, Zweig uses recent (up to early 2003) examples of Graham's concepts to make things clearer to modern readers. (Graham's text itself is his 1973 revision to the original 1949 edition.) Also helpful are numerous references to online articles at various sites (I cannot yet vouch for these links' present state.)
Based on my understanding, I highly recommend this edition to anyone interested in this book. I feel that I gleaned more from this annotated edition than I would have from the original, without having to conduct additional research.
