The Intelligent Investor was published in 1949 and authored by British-American Professor Benjamin Graham, a teacher of the world’s wealthiest investor alive Warren Buffett. The last revised edition of the book was published in 2009.
Benjamin Gram defines the intelligent investor in his book as someone who does not get carried away by the enthusiasm and manages his emotions, exerts self-control, discipline, and patience, and exhibits an eagerness to learn. It is not so much about being smart but rather about character.
The most famous quotes from Benjamin Gram
These are the most famous sayings of Benjamin Gram and the most important investment principles that were mentioned in the book, the Intelligent Investor:
Do not allocate more than 75% of your investment to stocks.
The intelligent investor is a realist who sells to optimists and buys from pessimists.
Don’t buy a stock immediately after a significant rise or sell it immediately after a significant drop.
The intelligent investor fears the bullish and booming market because the stock’s cost increases, and he welcomes the bearish and stagnant market because the stock prices seem to be on sale.
Stocks become riskier when their price increases, not the other way around, and they become attractive when their price decreases.
If you’re shopping for common stock, choose it the way you buy groceries, not the way you would buy perfume.
Stocks do well or poorly in the future because the companies behind them are doing well or poorly — no less, no more.
A clear and undoubted growth of a particular company does not mean a clear and undoubted profit for the investor.
Successful investors invest in sectors that most likely have future growth and then identify companies in these sectors that give the most promise.
A great company is not a great investment if you pay a lot for the stock.
Loss and risk quotes
A conservative investor who wants to protect his investment should limit his investment to companies having a long track record of profitable operations and strong financial performance.
The aggressive investor may buy other types of stocks, provided that his choice is based on an analysis.
Losing some money is an inevitable part of investing, and there is nothing you can do to prevent it. But to be an intelligent investor, you have to take responsibility for ensuring that you don’t lose most or all of your money.
Successful investing is about managing risk, not avoiding it.
The essence of investment management is managing risk, not returns.
Speculation and investment
People who invest make money for themselves, and speculators make money for their brokers.
There is intelligent speculation as there is unintelligent speculation. Stupid speculation means:
Speculating when you think you are investing
Speculating when you lack the knowledge and skills
Speculating with money that you cannot afford to lose.
Investing isn’t about beating others at their game. It is about controlling yourself at your own game.
The one unquestionable fact teaches us that the future will always – always – surprise us.
The investor’s chief problem—and even his worst enemy—is likely to be himself.
Don’t let other people’s judgment decide your own.