+ Nate Chai answers the question should you read Benjamin Graham’s The Intelligent Investor?
As part of this journey, I’m not limiting myself to property investment. So this week I read The Intelligent Investor by Benjamin Graham. Warren Buffett has said on numerous occasions that this is the best book on investing and whilst I’m in no position to disagree, I’m also in no position to agree with him either.
Make sure you’re ready for it
This book is packed full of wall street jargon and goes into explicit detail about stock prices, bond prices, “convertibles” etc. If you know nothing about those things then you’re in for a rough ride. I knew very little about these concepts when I first opened the book and found the beginning nigh impenetrable.
In order to get the most out of the book, you’re either going to have to read it with a search engine to hand (I recommend Investopedia), or already have a good understanding of how the financial sector (with a focus on the stock market) operates. If you have neither of these things then it’s easy to get lost in the details that Graham goes into.
You’ll still get something out of it
Despite not understanding half of the book, the other half seemed excellent. The parts where Graham explains things is clear and easily understandable for someone with as little knowledge as me to understand. For example, Graham clearly defines the differences between an Investor (someone who buys stocks and shares for the long haul) and a Speculator (someone who’s looking to make money sharpish and can manage a far higher amount of risk).
Similarly, Graham explains how Wall Street (and many other financial institutions) operates, which allows you to understand what makes a stock “good” or “bad”.
Personally, I found the book difficult to get through but in my quest to understand what’s going on I’ve learned a lot about the stock market and how it operates.
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