I’m not sure if Graham got there yet, but he advocates taking the average earnings over a long period of time (up to 10 years) to even out the fluctuations that companies sometimes show in their earnings.

I read this book because I’d heard good things about it, and because Buffett often calls it the best book on investing. I found a good amount of it boring at the beginning, since I too wanted to fast forward to Graham’s specific methodology for picking stocks.

However, I later appreciated Graham’s constant urging of buying stocks below intrinsic value and understanding the psychology of bull/bear markets. Much of what he wrote on how the public acts in such markets is so accurate that it sounds like it could’ve been written today. The Intelligent Investor was the book that helped me become numb to market fluctuations and the ensuing coverage by the media.

Trent, have you started picking individual stocks yet? You mentioned in a post a few weeks ago that your wife was urging you to do so. I’m sure you could outperform the market, as long as you consistently followed a value-oriented strategy. One thing I’ve found is that many of the legends identify that the only way to consistently beat the market is to always pay less than a company is worth. In my own experience, the margin of safety concept is priceless. I don’t follow Graham’s investing style, but I have definitely incorporated the margin of safety concept.

@Trent, I agree that Graham liked to earn dividends on his investments. However to say he looked at dividend income and not price appreciation as the main way to profit from his investments is inaccurate. The largest thing Graham paid attention to when buying was ‘Margin of Safety’ (Ch. 20) whether it was bonds, preferred or common stock. For the most obvious reasons of protecting his initial capital, but also to hopefully see the business rise back close to its intrinsic value i.e. capital appreciation. Graham figured if he bought enough issues with a healthy MOS, held over long periods of time, even with some failures, the entire portfolio earn quite a nice return.

Finally EDGAR is extremely powerful but yet quite cumbersome for the layman. The SEC is currently in the process of transitioning to a more user friendly electronic database. Currently only a few companies have opted in to submit these new electronic reports. Once it become mandatory, it will be sweeet.

Happy Holidays!

Ethan

A really good book.

Your right many people/investors want to quickly know HOW to pick stocks or for someone to give them the picks.

One of the hardest things in investing is sitting on the sidelines waiting and being patient, most people want action and this can get them in trouble.