intelligent investor the classic text on value investing

When an investor buys a stock at a price less than its intrinsic value, they are essentially purchasing it at a discount. At this point, the stock price will reflect its true value. The mean reversion theory holds that over time, the market price and the intrinsic price will converge.

If the intrinsic value is more than the market value-in other words, the stock is undervalued in the market-the investor should buy and hold until a mean reversion occurs.

Analyzing a company’s assets, earnings, and dividend payouts can help identify the intrinsic value of a stock, which can then be compared to its market price. Value investing is deriving the intrinsic value of a common stock independent of its market price. Over the years, market developments have proven the wisdom of Graham’s strategies. Graham’s philosophy of “value investing”-which shields investors from substantial error and teaches them to develop long-term strategies-has made The Intelligent Investor the stock market bible ever since its original publication in 1949. This classic text is annotated to update Graham’s timeless wisdom for today’s market conditions… The greatest investment advisor of the twentieth century, Benjamin Graham, taught and inspired people worldwide. His principles of investing safely and successfully continue to influence investors today. Thus, according to Graham, investors should always aim to profit from the whims of the stock market, rather than participate in it. One of Graham’s key contributions was to point out the irrationality and group-think that was often rampant in the stock market. By evaluating companies with surgical precision, Graham excelled at making money in the stock market without taking big risks. Known as the father of value investing, The Intelligent Investor: The Definitive Book on Value Investing is considered one of the most important books on the topic. While physicist Sir Isaac Newton is widely viewed as the leading authority on gravity and motion, economist Benjamin Graham, best known for his book The Intelligent Investor, is lauded as a top guru of finance and investment.

Intelligent investor the classic text on value investing