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The Intelligent Investor Revised Edition

The Intelligent Investor, Rev. Ed

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Highlights

Graham’s Security Analysis was the textbook that transformed this musty circle into a modern profession. — location: 161 ^ref-26231

We have some doubt whether a really substantial extra recompense is promised to the active investor under today’s conditions. But next year or the years after may well be different. — location: 288 ^ref-38975

Before attempting such a venture the investor should feel sure of himself and of his advisers—particularly as to whether they have a clear concept of the differences between investment and speculation and between market price and underlying value. — location: 352 ^ref-34660

A strong-minded approach to investment, firmly based on the margin-of-safety principle, can yield handsome rewards. But a decision to try for these emoluments rather than for the assured fruits of defensive investment should not be made without much self-examination. — location: 354 ^ref-60080

In most periods the investor must recognize the existence of a speculative factor in his common-stock holdings. It is his task to keep this component within minor limits, and to be prepared financially and psychologically for adverse results that may be of short or long duration. — location: 502 ^ref-15976

But there are many ways in which speculation may be unintelligent. Of these the foremost are: (1) speculating when you think you are investing; (2) speculating seriously instead of as a pastime, when you lack proper knowledge and skill for it; and (3) risking more money in speculation than you can afford to lose. — location: 509 ^ref-46533

If you want to try your luck at it, put aside a portion—the smaller the better—of your capital in a separate fund for this purpose. Never add more money to this account just because the market has gone up and profits are rolling in. — location: 515 ^ref-64041

Never mingle your speculative and investment operations in the same account, nor in any part of your thinking. — location: 517 ^ref-42055

The defensive investor must confine himself to the shares of important companies with a long record of profitable operations and in strong financial condition. — location: 623 ^ref-41229

purchase of the shares of well-established investment funds as an alternative to creating his own common-stock portfolio. — location: 627 ^ref-13247

The third is the device of “dollar-cost averaging,” which means simply that the practitioner invests in common stocks the same number of dollars each month or each quarter. In this way he buys more shares when the market is low than when it is high, and he is likely to end up with a satisfactory overall price for all his holdings. — location: 630 ^ref-12666

He may be wrong in his estimate of the future; or even if he is right, the current market price may already fully reflect what he is anticipating. — location: 660 ^ref-59371

To enjoy a reasonable chance for continued better than average results, the investor must follow policies which are (1) inherently sound and promising, and (2) not popular on Wall Street. — location: 670 ^ref-35423

By random luck alone, the companies that produce above-average stock returns will have plenty of things in common. But unless those factors cause the stocks to outper-forms, they can’t be used to predict future returns. — location: 865 ^ref-5650

vindication of the inflation hypothesis and as a reason to keep on buying common stocks no matter how high the market level nor how low the dividend return. That way lies sorrow. — location: 1003 ^ref-1001

All we should say to the investor is, “Be sure it’s yours before you go into it.” — location: 1021 ^ref-61748

The historical evidence is clear: Since the advent of accurate stock-market data in 1926, there have been 64 five-year periods (i.e., 1926–1930, 1927–1931, 1928–1932, and so on through 1998–2002). In 50 of those 64 five-year periods (or 78% of the time), stocks outpaced inflation.9 That’s impressive, but imperfect; it means that stocks failed to keep up with inflation about one-fifth of the time. — location: 1082 ^ref-23057

Since common stocks, even of investment grade, are subject to recurrent and wide fluctuations in their prices, the intelligent investor should be interested in the possibilities of profiting from these pendulum swings. — location: 2847 ^ref-42047

Here, Graham agrees that we must be open to profit from the swings in the market.

We are equally sure that if he places his emphasis on timing, in the sense of forecasting, he will end up as a speculator and with a speculator’s financial results. — location: 2855 ^ref-61546

Time the market, and die.

any approach to moneymaking in the stock market which can be easily described and followed by a lot of people is by its terms too simple and too easy to last. — location: 2939 ^ref-12935

The whole structure of stock-market quotations contains a built-in contradiction. The better a company’s record and prospects, the less relationship the price of its shares will have to their book value. But the greater the premium above book value, the less certain the basis of determining its intrinsic value—i.e., the more this “value” will depend on the changing moods and measurements of the stock market. Thus we reach the final paradox, that the more successful the company, the greater are likely to be the fluctuations in the price of its shares. This really means that, in a very real sense, the better the quality of a common stock, the more speculative it is likely to be—at least as compared with the unspectacular middle-grade issues. — location: 2984 ^ref-4210

If he is to pay some special attention to the selection of his portfolio, it might be best for him to concentrate on issues selling at a reasonably close approximation to their tangible-asset value—say, at not more than one-third above that figure. — location: 2998 ^ref-24843

The price per share must not be more than 4/3rd of the tangible asset value of the company.

A stock does not become a sound investment merely because it can be bought at close to its asset value. The investor should demand, in addition, a satisfactory ratio of earnings to price, a sufficiently strong financial position, and the prospect that its earnings will at least be maintained over the years.

At other times he will do better if he forgets about the stock market and pays attention to his dividend returns and to the operating results of his companies. — location: 3096 ^ref-2506

“The more it changes, the more it’s the same thing.” — location: 3149 ^ref-10616

Last update : 25 mai 2024
Created : 21 septembre 2023