Benjamin Graham

The Intelligent Investor

1. IDEA 1

   Investing differs from speculation

   Graham, often called the father of value investing, distinguishes investment, which involves careful analysis, safety of principal and adequate return, from speculation, which is betting on price movements. He argues that many people speculate without realising it.

2. IDEA 2

   Mr Market is moody

   Graham describes Mr Market, an imaginary partner who offers to buy or sell shares every day at prices that swing with his moods. Graham's point is that investors should not let market moods control them.

3. IDEA 3

   Margin of safety protects

   Graham argues for a margin of safety: buying only when the price is well below the estimated value. This protects against mistakes. The wider the gap, the more room there is for errors and bad luck, in Graham's view.

All 8 ideas from The Intelligent Investor →