欧宝娱乐

The central Idea that I got from this book is that an Index Stock Fund outperforms other equity funds on a historical basis. And sometimes it outperforms active investing too. And from my wife鈥檚 portfolio of 5 years, it seems to be true.

The other Idea is the emotional Mr. Market. The stock market as a speculative investment is a zero-sum game, and Mr. Market plays the role of the crazy trader who trades stocks at a different price everyday. Of course, the book encourages investing for the long term where the stock value grows along with the economy. But for active investors, it is recommended that they study Mr. Market鈥檚 price variations and invest in their preferred stock at their lowest price.

Investment here is also specifically mentioned to be different from trading or speculating. Some may call it 鈥楩undamental鈥� investing and what it means is just that one must study the company鈥檚 fundamentals (financials/management) before selecting it for investment. Normally the investment would be long term and the only time to sell is if the company鈥檚 direction or management does not fit with investor鈥檚 requirements anymore.

Lastly, the book introduces the concept of Margin of Safety. Of course, the writer puts this concept in context of the Great Depression of the 1930s. The idea is that even if a stock looks cheap on paper, you still can get screwed by the irrational Mr. Market who prices it lower and lower. So a stock that looks borderline cheap is not good enough. Ben Graham recommends to have a bigger Margin of Safety and buy it really cheap. It will help with the sleeping soundly at night too. It is the result of living through the Great Depression and it is a lowering of one鈥檚 risk to the point where the returns will be quite limited too.

For a basic course in investing, one cannot go wrong with this book, BUT for normal readers, the writing style might be a bit archaic. It IS written quite a long time ago. For those who have read this book, they will have the basics to invest but in order to get a better return, they must next read Common Stocks and Uncommon Profits.