Discover more from Pilane Capital
The best book on investing ever written
It’s a pretty bold statement: the best book ever written on stock market investing.
Thing is, I don’t even READ book reviews so I can’t see book reviews happening too often around here.
Twitter lists of top 10 books on investing, finance, or whichever subject catches my wandering attention, and buying the titles that have a habit of appearing most often is my preferred method of book shopping.
So when I do muster up the minerals to write a review, it means I’ve found a book so compelling that I have to share it with you.
Mercifully I can save you the hassle of trawling through the rest of today’s article and just put it out there: you need to buy The Intelligent Investor by Benjamin Graham.
This book is exceptional, especially if you:
are a bit lazy like me
want to understand the basis of my personal investment style
want the simplest low-risk and profitable investment strategy that you could ever find
That last one is a lie.
The simplest low-risk and profitable stock market investment strategy is to purchase a low-cost tracker fund every month from your wages or as a lump sum – depending on your wealth status – and keep purchasing it then leave it for 40 years.
Set and forget.
I want more CONTROL than that though, don’t you?
But not too much; remember we’re a little lazy. And that’s okay.
Don’t you want to make sense of the stock market that most people view as a giant casino?
Spoiler: the stock market IS a giant casino backed by trillions of dollars made up out of thin air.
But that’s an article for another time.
Here’s why the Intelligent Investor by Benjamin Graham is the best stock market investing book of all time
The investor’s chief problem – and even his worst enemy – is likely to be himself
There is enough quote-worthy wisdom within the pages of The Intelligent Investor to fill a beer barrel.
It’s superb for the occasional tweet/social media post when you’re pushed for time to create content.
“The function of the margin of safety is, in essence, that of rendering unnecessary an accurate estimate of the future.”
— Wealth Accumulated (@djthomas) August 1, 2022
See what I mean? Even if you may not know what the margin of safety is. Chill.
It was written in 1949 with 1949 language.
It’s author, Benjamin Graham, was not only known as a superb mentor but also forhis intellectual acumen.
He would famously quote passages of Cicero .
But it’s well worth the effort to get to grips with a transformative investment style that has helped professional fund managers and the general public, you’ll see.
Among the opulence of Graham’s guidance is his stated aim: to appeal to EVERYBODY, regardless of your station in life or financial literacy.
From the local parish priest to the multi-billion dollar fund manager.
Oh, and Graham’s strategies have stood the test of time since the book was first published in 1949.
It works. It still works. And it will continue to work, especially in developed Western financial markets.
The secret sauce of the value investing approach that Graham pioneered is a strategy for your lifetime and those of your grandchildren.
One strategy in particular called the relatively unpopular large company is a profitable, low-risk, value investing strategy that I use to this day with great success.
It appeals to both the lazy and risk-taker in me.
Perhaps it can for you.
These characteristics are suited to the value investing approach: buy stocks when they’re cheap, and sell them when they’re overvalued.
Do nothing in between.
The relatively unpopular large company
This investing strategy is about as basic and low maintenance as it gets.
You’re not asked to pour over financial statements, spend hours interpreting breaking news items from the so-called financial media or pull yourself away from the golf course.
Trigger warning: I’m assuming that you play golf, drive a Volvo, and own a labrador.
If you do then you’re winning at life.
The relatively unpopular large company is a paint-by-numbers strategy:
Buy only large-cap stocks
Buy them when they are experiencing a period of temporary unpopularity
Make sure you buy enough to diversify your portfolio
What’s more, there are different types of value investing approaches for you to choose from if you don’t like this one.
If you feel a more thorough approach to investing is your bag, then there’s one in there for you.
It just depends on how much time you’d like to spend away from the 18th hole.