Book note of two key chapters in “The Intelligent Investor”

“The Intelligent Investor”, written by Ben Graham, is deemed the bible of value investment. Warren Buffett called this book is “by far the best book on investing ever written”. This is the 1st book ever to describe, for individual investors, the emotional framework and analytical tools that are essential to investment success. It stays the single best book on investing ever written for the general public.

Amid the current turbulence of stock market, it is best for our individual investors to be equipped with the proper psychological mindset and methodical tools in order to survive and/or thrive in the nowadays world of investment. Therefore, I re-read this book quite often, like every month this year, in order to always keep the light in front of my feet.

Warren Buffett said “If you follow the behavioral and business principles that Graham advocates—and if you pay special attention to the invaluable advice in Chapters 8 and 12—you will not get a poor result from your investments.” Chapter 8, titled “The investor and Market Fluctuations”, focuses on how to use market fluctuations as a guide to make prudent investment decisions. It introduces readers the best investment emotional framework. Chapter 12, dubbed “Things to consider about per-share earnings”, illuminates the rational ways to estimate long term per share earnings, growth rate and identify the accounting factors reflected in the per-share earnings. It presents readers  the best analytical investment tools.

To help you quickly grasp the two critical chapters of this book, I am now posting my reading note of chapter 8 and 12 here.

Booknote_chap8 The Investor and Market Fluctuations

Booknote_chap12 Things to consider about per-share earnings

About Timeless Investor

My name is Samual Lau. I am a long-term value investor and a zealous disciple of Ben Graham. And I am a MBA graduated in May 2010 from Carnegie Mellon University. My concentrations are Finance, Strategy and Marketing.
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