Benjamin Graham was an influential American economist and investor who is considered the father of value investing. He wrote two influential books, Security Analysis and The Intelligent Investor. The Intelligent Investor teaches the distinction between investing and speculation, with investing focused on analyzing companies and protecting against losses, while speculation aims for extraordinary gains. It also covers topics like how to select stocks, dealing with market fluctuations, and the importance of a margin of safety. The book has been hugely influential on investors like Warren Buffett and remains one of the foundational texts on value investing.

2. About the Author
 BENJAMIN GRAHAM (May 9, 1894 – September 21, 1976)
 He born in London, England. Later he moved to New York with his family.
 He was graduated from Columbia University.
 Graham is considered the father of VALUE INVESTING. He is American
economist and professional investor.
 His second book THE INTELLIGENT INVESTOR published in 1949. his
first book was SECURITY ANALYSIS.
 Warren Buffett describes this book as “the best book about investing ever
written”.
 Warren Buffett was the student of Graham. He described him as the most
influential person in his life after his father.

3.  This was published in 1973 as the “Fourth Revised Edition” and it included
a preface and appendices by Warren Buffett.
 Commentaries and new footnotes were added to the fourth edition by
Jason Zweig, and this new revision was published in 2003.
 Jason Zweig became a personal finance columnist for The Wall Street
Journal in 2008. He was a senior writer for Money magazine and a guest
columnist for Time magazine and cnn.com.

4. About Book
 In this book there is a fundamental distinction between INVESTMENT and
SPECULATION.
 THE INTELLIGENT INVESTOR the stock market bible ever since its
original publication in 1949.
 Graham distinguished between the passive and the active investor.
 He wrote that investment is most intelligent when it is most business like.
 In this book Mr .Market is an allegory created by investor Benjamin
Graham. Graham asks the reader to imagine that he is one of the two
owners of a business, along with a partner called Mr .Market.

5. Content:
 Chapter 1: Investment vs Speculation
 Chapter 2: Investing and Inflation
 Chapter 3: Learning from history
 Chapter 4: General Portfolio Policy
 Chapter 5: Be defensive
 Chapter 6: The Don’ts of Investing
 Chapter 7: The Do’s of Investing
 Chapter 8: Market Fluctuations and realizing they will happen
 Chapter 9: All about Funds
 Chapter 10: The Investor and His Advisers

6. Content:
 Chapter 11: Security Analysis
 Chapter 12: Things to consider in per share earnings
 Chapter 13: Comparison of Four Companies
 Chapter 14: Stock Selection for the Defensive Investor
 Chapter 15: Stock Selection for the Enterprising Investor
 Chapter 16: Converttable Issues and Warrants
 Chapter 17: Four Extremely Instructive Case Histories
 Chapter 18: Comparison of Eight Paris of Companies
 Chapter 19: Dividend Policy
 Chapter 20: Margin of Safety is the main concept of investing

7. INTRODUCTION-
 This book will teach you three powerful lessons:
• how you can minimize the odds of suffering irreversible losses;
• how you can maximize the chances of achieving sustainable gains;
• how you can control the self-defeating behaviour that keeps most investors from reaching
their full potential.
 Sir Isaac Newton was one of the most intelligent people who ever lived, as most of us would
define intelligence. But, in Graham’s terms, Newton was far from an intelligent investor.
 “while enthusiasm may be necessary for great accomplishments elsewhere, on stock market it
almost invariably leads to disaster.”
 The death of the bull market is not the bad news everyone believes it to be. Thanks to the
decline in stock prices, now is a considerably safer and saner time to be building wealth.
 Once if you loose 95% of your money, you have to gain 1,900% just to get back to where you
started.

8. ABOUT INVESTMENT-
 A fundamental distinction between investment and speculation. "An investment operation is one
which, upon thorough analysis, promises safety of principal and an adequate return.
 “Operations not meeting these requirements are speculative”. it consists of three elements.
• you must thoroughly analyze a company, and the soundness of its underlying businesses,
before you buy its stock;
• you must deliberately protect yourself against serious losses;
• you must aspire to “adequate,” not extraordinary, performance.
 On the other hand, investing is a unique kind of casino one where you cannot lose in the end, so
long as you play only by the rules that put the odds squarely in your favour.

9.  The stock market’s performance depends on three factors:
• real growth (the rise of companies’ earnings and dividends)
• inflationary growth (the general rise of prices throughout the economy)
• speculative growth or decline (any increase or decrease in the investing public’s
appetite for stocks)
 By 1999 at least six million people were trading online and roughly a tenth of them
were “day trading,” using the Internet to buy and sell stocks at lightning speed. They
have a word in there mouth as “I’m Taurus the bull, so I react to red. If I see red, I sell
my stocks quickly.”

10. DEFENSIVE INVESTOR-
 Graham distinguished between the passive and the active investor. The passive investor,
often referred to as a defensive investor, invests cautiously, looks for value stocks, and buys
for the long term.
 The active investor, on the other hand, is one who has more time, interest, and possibly
more specialized knowledge to seek out exceptional buys in the market.
 We have suggested as a fundamental guiding rule that the investor should never have less
than 25% or more than 75% of his funds in common stocks, with a consequent inverse
range of between 75% and 25% in bonds.
 He may be guided in his selection by the rating given to each issue by Moody’s or Standard
& Poor’s. One of three highest ratings by both services Aaa (AAA), Aa (AA), or A should
constitute a sufficient indication of adequate safety.
 Do not buy more stocks because the stock market has gone up; do not sell them because it
has gone down.

11.  That, says Graham, depends less on what kinds of investments you own than on what kind of
investor you are. There are two ways to be an intelligent investor:
• by continually researching, selecting, and monitoring a dynamic mix of stocks, bonds,
or mutual funds
• or by creating a permanent portfolio that runs on autopilot and requires no further effort
(but generates very little excitement).
 As the investment thinker Charles Ellis has explained, the enterprising approach is physically
and intellectually taxing, while the defensive approach is emotionally demanding.
 The mutual fund was introduced in 1924 by Edward G. Leffler.
 A traditional rule of thumb was to subtract your age from 100 and invest that percentage of
your assets in stocks, with the rest in bonds or cash.

12. HOW TO SELECT THE SHARES-
 This tell you not to buy a stock just because you like their product. You need to do
an analysis of the financial statements to protect yourself from a risky investment.
 Each company selected should be large, prominent, and conservatively financed
and it should have a long record of continuous dividend payments.
 “You can outperform the experts if you use your edge by investing in companies or
industries you already understand”
 “Finding the promising company is only the first step. The next step is doing the
research.”
 That’s why “investing in what you know” can be so dangerous; the more you know
going in, the less likely you are to probe a stock for weaknesses.

13.  Adequate size of the enterprise
 Sufficiently strong financial condition (2:1 current ratio)
 Earnings stability (some earnings every year last 10 years)
 Dividend record (uninterrupted payments for at least 20 years)
 Earnings growth (1/3 increase in per share EPS past 10 years)
 Moderate price/earnings ratio (P/E < 15x average last 3 years EPS)
 Moderate ratio of price to assets
 “there are many roads to Jerusalem.” value-centered method of selecting stocks
was not the only way to be a successful investor
 Graham advised investors to practice first. He suggested starting off by spending
a year tracking and picking stocks (but not with real money).

14. WHEN MARKET FLUCTUATES-
 “Never buy a stock immediately after a substantial rise or sell one immediately after a
substantial drop.”
 You can’t control whether the stocks or funds you buy will outperform the market today, next
week, this month, or this year; in the short run, but you can control: your brokerage costs,
your ownership costs, your expectations, your risk, your tax bills, your own behaviour.
 But investing isn’t about beating others at their game. It’s about controlling yourself at your own
game.
 Unfortunately, in the financial markets, luck is more important than skill.
 Finally, look at past performance, remembering that it is only a pale predictor of future returns.
As we’ve already seen, yesterday’s winners often become tomorrow’s losers. But researchers
have shown that one thing is almost certain:
 Yesterday’s losers almost never become tomorrow’s winners. So avoid funds with consistently
poor past returns especially if they have above-average annual expenses

15.  Even good quality common stocks fluctuate, and the investor will want to profit from
this. He can either use Timing or Pricing.
 Timing = buying when the trend Is up and selling when the trend is down.
 Pricing = buying when stocks below fair value and selling when above fair value.
 Pricing is the better method. If timing is used, you become a speculator and get
speculative results.
 Everyday in market there are prediction of the direction of the market, and that it is
incumbent on the individual to form some opinion of the future course of the market.
 Timing is important to the speculator because he wants to make a profit in hurry.
Investors are not in a hurry. Timing is of no real value unless it coincides with pricing.

16. SECURITY ANALYSIS-
 Graham feels that five elements are decisive. He summarizes them as:
• the company’s “general long-term prospects”
• the quality of its management
• its financial strength and capital structure
• its dividend record
• and its current dividend rate.
 The most basic possible definition of a good business is this: It generates more cash than it
consumes.
 A few pointers will help you avoid buying a stock that turns out to be an accounting time
bomb:
Read backwards.
Read the notes.
Read more

17.  Although there are good and bad companies, there is no such thing as a good stock; there are
only good stock prices, which come and go.
 When you buy a stock, you become an owner of the company. Its managers, all the way up to
the CEO, work for you. Its board of directors must answer to you. “Stockholders,” “should
wake up.”
 Risk didn’t mean losing money; it meant making less money than someone else.
 The people who take the biggest gambles and make the biggest gains in a bull market are
almost always the ones who get hurt the worst in the bear market.
 And once you lose big money, you then have to gamble even harder just to get back to where
you were. Unless you are phenomenally lucky, that’s a recipe for disaster.

18. LEARNINGS-
 This book gave me the detail explanation of investment, when to invest, how to
invest and where to invest.
 In what basis we should select the shares.
 PATIENCE.
 Every company will say about its future projects and investors will get attracted and
invest in that company, but you should also see the company past performance.
 LUCK.