The Intelligent Investor

I figure that the first post on a blog needs to a 'defining' entry on the proposed topic of the blog. Since we're starting this blog to focus on investing (and personal finance issues), I want this entry to be the most valuable entry that this blog will ever see.

I've recently had a few close friends (and family) ask me some relatively untargeted questions related to the expansive topic of 'investing'. How am I supposed to answer the question, "Can you help me with some investing?" in 100 words or less?

Since I have no reason to know how sophisticated, (un)educated, or (in)experienced an acquaintance may (or may not) be...this entry is therefore designed to be the most important piece of investing advice that I could ever give to anyone. It is advice that can be valued by the most amateur of novices or by the most accomplished expert -- read the authoritative bible on investing - The Intelligent Investor; The Definitive Book on Value Investing by Benjamin Graham.

What could be better than the book that Warren Buffett calls "By far the best book on investing ever written"?

Jason Zwieg has contributed to modern versions of the book and has a nice set of resources where one can Read About The Intelligent Investor. He also does a great job asking and answering the questions - "who was Benjamin Graham and why should I care". Additionally, this link highlights many of Graham's principals of value investing and this link asks and answers the

Over time, I hope to outline and discuss the philophies in the Intelligent Investor on this blog. In the meantime I will defer to the following comments from Amazon.com to highlight the book:

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.

Since its original publication in 1949, Benjamin Graham's book has remained the most respected guide to investing, due to his timeless philosophy of "value investing," which helps protect investors against the areas of possible substantial error and teaches them to develop long-term strategies with which they will be comfortable down the road.

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" . 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.

Over the years, market developments have borne out the wisdom of Benjamin Graham's basic policies. Here he takes account of both the defensive and the enterprising investor, outlining the principles of stock selection for each, and stressing the advantages of a simple portfolio policy.

Related Links:
(1) Motley Fool: Who was Benjamin Graham

(2) Warren Buffett Secrets: Biography of Benjamin Graham

(3) Deeper Blog: Book Review