Warren Buffett states that there are only two books worth reading if you want to seriously consider getting into the stock market investment game. One of these books happens to be a book by Buffett’s teacher – Benjamin Graham. The book is called The Intelligent Investor.
Frankly speaking, the book is awesome. Interestingly enough, it was written in 1949 and it has not changed much. Why’s that? after all a book on investment should tell you which stocks you should pick, strategies you should use, come up with a fancy (read: weird) math formulas and KAZAM, you’re on your way to that pipe dream of yours of being surrounded by a multitude of gals ready to party.
The above couldn’t be further from the truth. The book itself has not changed since 1949 because it attempts to explain the frame of mind which someone should possess if wanting to get into stock market investment. The language of the book is plain and simple, just perfect for a layman to understand. The book is really about investing with common sense. Nothing more, nothing less. It advises to move away from speculation, it proposes concepts that one can actively use in determining whether they want to (or not) put the money down to buy a piece of a company and most importantly, it takes the long-term approach. No quick millions here people.
I really enjoy the book because of the simple language without any fancy definitions. It is actually full of examples with advice on what to look for in a company. A nice almost “cute” addition is the fact that the book is filled with 1940’s era stock-market prices (as that is what was available at the time to use as examples). The fact the book is still in print with these prices should tell you exactly what I mentioned in the beginning – it tries to convey that it is not about what you should buy – but it is about the mentality you absolutely must have when shopping around for a good stock deal.
Also, it emphasizes that if you want to have better than average returns than you should not have a stock broker hired to pick the stock for you. You should learn yourself what stock to pick because the stock broker – first and foremost – has his or hers brokerage house’s interests in mind and not yours (the assumption is that by making a lot money to the house, the average person will also be content – but you’re into this to beat the average no?).
If you need to take one thing out of this post is that you should not be buying a single stock without reading this book first.