If you are thinking about the best book to educate yourself on the uneasy way of value investing, “The Intelligent Investor: The Definitive Book on Value Investing” might the best choice for you. It’s considered as a neoclassical investment guidebook by many economists and known to contain the timeless secrets for understanding market conditions.
The author of this bestseller is famous “father of value investing” Benjamin Graham born in 1894 in the UK. His trading career started at the age of 20 on Wall Street and included the outstanding results in investing and teaching. Many talented traders were tutored by him, including such legend as Warren Buffett, who described him as the second most influential man in his life after his father.
The first book that Benjamin Graham has written was “Security Analysis” published back in 1934. It was received very warmly but not as much as the next one “The Intelligent Investor”, which was released in 1949. In the fast changing world, this book was the first attempt (and a very successful one) to distinguish speculation and investment. It read, "An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative."
Judging by the trading style, Graham divided all traders into the 2 kinds: active and passive. Active investors spend their time on looking for the best deals on the market - it's their main interest and passion. As for the passive ones, they tend to make their investments on the long term basis, very cautiously and without any haste. Meanwhile, all traders should pay special attention to investing into the companies with the margin of safety (the difference between the intrinsic value of the company and its market price).
For all traders who are often fooled by the unexpected actions Mr Market, we recommend to read this amazing book and understand that it’s not at all wise to depend on his irrational behaviour.