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IntelligentInvestor

Introducion

  1. purchase stocks only when price is not much more than Tangible Asset value. pg. xvi
  2. meeting market performance is easy, just buy the index, but beating it is hard, even for experts.

Chapter 1

  1. investing is not speculating, and vice versa.
  2. an investor can be a 'defensive' type or 'active' or 'agressive' type.
  3. a portfolio should consist of both bonds and stocks, with a ratio of 25/75 to 75/25, depending on expected returns found in the bonds and/or the stocks.
  4. agressive investors can
    1. 'trade the market' that is use momentum tactics,
    2. focus on short term expectations,
    3. focus on long term expectations.
  5. the first is speculation, short term prospects are hard to use for better than average returns because everyone else is doingit, but long term view is best opportunity to best the averages, mainly by focusing on issues that are sound AND unloved by Wall Street.

Chapter 2

  1. holding stocks as a hedge against inflation is not sound policy, and does not eliminate the risks associated with stocks. A properly balanced portfolio of both stocks and bonds is best.

Chapter 3

  1. discusses the general 'investibility' of the overall market, in 5-year chunks concluding that the (present) time of 1972 was not favorable for stocks and the author suggests a 50/50 distribution of stocks vs. bonds.

Chapter 4

  1. bonds are a good way for the defensive, more passive investor to put his money to work.
  2. municipal bonds often are better for the higher tax bracket investor, tax-wise, and non-munis are better for the lower tax bracket investor.
  3. preferred shares are generally not good investments due to limited upside growth. They should be considered only when a real bargain price is available.

2014-03-06 At last, read it through. Need to read again! Gives much good advice to both the 'defensive' investor and the 'enterprising' investor, fundamentally focused on discovering the value of a business, right now, and comparing that to the current market valuation. If the market value is discounted, the stock is worthy of further consideration. Graham suggests staying with top tier (DJIA) issues and 'second tier' issues with long histories of profits.