I don’t know anything about the share market. Nada. As soon as the S&P stats appear on the nightly news, my eyes glaze over and I’m turned off.
So I thought I should do something about that. I’m a women in my 30s with a family to support, after all. I figured it was time to educate myself. I did some cursory googling, asking myself “WWWBD (What Would Warren Buffet Do)?”, before buying The Intelligent Investor. It seemed like a good place to start.
And it was… fine, I guess. Just dated. Which is no real surprise, as Benjamin Graham published the first edition in 1949, revised it several times, and then died in 1976.
His advice is what you’d expect from a solid and risk-averse investment strategy:
- The art of successful investment is based on first selecting the industry that is most likely to grow, then choosing the most promising company within that industry.
- The investor’s chief problem is his own emotions. Investment is most intelligent when it is most businesslike.
- Base your buys on arithmetic, not optimism.
- Only have courage once you’ve acquired knowledge and experience.
It’s not rocket science. And bad bets seem quite inevitable, so the message is of course to balance your portfolio and ride out the waves.
Graham does his best to explain wall street terminology, common pitfalls, simple strategies, and decision-making principles. He presents case studies and exposes potential scams for the wary. He also gives information on the way to go about investing – using advisors or going it alone – without being too preachy.
But it honestly didn’t help me too much, given recent changes to investment thinking. Perhaps I knew more to start with than I thought. There is no hint of Exchange Traded Funds (ETFs) in the book (not suprising , given those didn’t exist during Graham’s life!), no advice on how to balance an investment portfolio that also includes property, and no advice on retirement funds.
It was a fine introduction to the world of Wall Street, but that is a long way from where I currently am (both geographically and in my thinking).
3 Common Stocks out of 5.
This is my 26th review! I did it! Hurrah!