📘 "The Intelligent Investor" - Benjamin Graham's classic on value investing

Hello everyone~ Today I would like to introduce to you a heavyweight book known as the "investment bible" - "The Intelligent Investor" 💰📈.

Written by Benjamin Graham (1894-1976) , the "father of value investing," this book, first published in 1949, remains a classic in the investment world. His students include Warren Buffett, who once declared, "The Intelligent Investor is the best investment book ever written."

I believe the essence of this book isn't about teaching you how to "trade stocks," but rather about developing a rational, disciplined, and long-term investment mindset. For Hong Kongers, where speculative investing is rampant, this book is a welcome wake-up call.

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📖 Book Background

1. About the Author

• Benjamin Graham : American economist, investor, and professor.
• He is known as the "Father of Value Investing" and proposed concepts such as "Margin of Safety".
• His investment theory has had a profound influence on later generations, especially on Buffett, John Neff, Peter Lynch and others.

2. Book positioning

• A classic introduction to value investing : Through theory and case studies, it teaches readers how to invest rationally.
• Long-term investment guide : emphasize safety margin, discipline, and mentality.
• Anti-speculative thinking : teach you to distinguish between "investment" and "speculation".

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💡 The core concept of the book

1. Investing vs. Speculating ⚖️

• Investment: Based on in-depth research, we pursue reasonable returns and control risks.
• Speculation: Relying solely on luck or market sentiment to chase short-term fluctuations.
  👉 The editor feels that many Hong Kong people buy stocks for speculation, but they think they are investing.

2. Margin of Safety 🛡️

• The most important principle of investment is "protecting principal".
• Buy below intrinsic value to leave a safety buffer.
• This is like buying a property at a good value rather than a high price.

3. Mr. Market 🤵📉📈

• Graham uses the metaphor of "Mr. Market" to describe the stock market:
  • Sometimes emotions run high and quotes are excessive.
  • Sometimes pessimistic and depressed, and the quote is too low.
• Smart investors will not follow their emotions, but take advantage of their irrational quotes.
  👉 I think this metaphor is super classic. It describes the situation where the Hong Kong stock market rises hundreds of points one day and falls hundreds of points the next day. It is completely appropriate!

4. Defensive vs. Aggressive Investors 🧑💼

• Defensive investors : They are conservative and avoid mistakes, suitable for the average office worker. Their strategies include buying high-quality blue-chip stocks and index funds.
• Aggressive investors : spend more time researching, looking for undervalued stocks, and taking more risks.
• The book reminds you that most people should take a defensive approach.

5. Portfolio Concept 📊

• Diversify your investments and don't put all your eggs in one basket.
• The stock + bond ratio needs to be adjusted according to risk tolerance, for example 50/50.
• The investment portfolio should be reviewed regularly, but frequent adjustments should be avoided.

6. Long-term and disciplined ⏳

• Investing is a long-distance race, not a short-distance race.
• Be disciplined and don't get emotional due to market fluctuations.
• Buffett summed up his teacher's philosophy: "Successful investing requires rationality, not IQ."

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📊 Key chapters in the book

Market Fluctuations

• Investors must learn to accept market fluctuations rather than be led by them.
• Volatility is an opportunity, not a risk.

Investors and Inflation

• Inflation erodes purchasing power. Although stocks are risky, they are better at fighting inflation than cash in the long run.

Portfolio Policy

• It is recommended that ordinary investors should simplify their investment, for example, by allocating index funds + high-quality bonds.

Defensive Investment Strategies

• Suitable for those who don’t want to spend too much time but still want to preserve and increase the value of their money.
• For example: buying index funds at regular intervals and in fixed amounts.

Aggressive Investment Strategy

• Suitable for professional investors who need to do extensive research on business fundamentals.
• For example: looking for undervalued stocks with low price-to-earnings ratios, low price-to-book ratios.

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🌍 The inspiration that "The Intelligent Investor" brings to Hong Kong people

High-end culture

Speculation is rampant in the Hong Kong market, but Graham reminds everyone:

• Speculation is not the same as investment.
• There must be a margin of safety and don't chase high prices.

Asset Allocation

Many Hong Kong residents invest their money in the property market, but the book reminds people to diversify their risk by investing in stocks, bonds, and cash.

Long-term thinking

Hong Kong people like to "make money by short-term speculation", but "The Intelligent Investor" emphasizes that long-term holding and compound interest appreciation are the real ways to get rich.

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🤔 What do you think?

After reading it, the editor feels that the greatest value of "The Intelligent Investor" is to help investors develop the right mindset .
He is not teaching you "buy a stock", but teaching you:

• How to deal with market fluctuations
• How to control risks
• How to protect your money with discipline and common sense

If Hong Kong people can use the wisdom in this book to invest, we may no longer hear stories of "speculating too much" or "losing everything" every day.

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🎉 Editor’s Summary

The core value of "Smart Investor":

• Investing ≠ Speculation ⚖️
• Margin of safety : Buy below value to protect principal🛡️
• Mr. Market : Take advantage of market sentiment, don't be led by it 🤵
• Defensive vs Aggressive : Most people should choose a conservative strategy🧑💼
• Diversified investment : reasonable allocation of stocks + bonds 📊
• Long-term and discipline : rationality and patience are more important than IQ⏳

👉 So next time you're thinking about investing, consider opening "The Intelligent Investor" first, because this book will remind you: intelligence isn't based on "smartness," but on "rationality + self-discipline"! 📘✨