Almost fifty years have passed since Benjamin Graham wrote his seminal work The Intelligent Investor.
Right now, at the start of:
What’s incredible is that most investors would agree with him (according to Robert Schiller’s crash confidence index)—but the bubble keeps growing and growing.
he advice was last updated in:
Fifty years of massive change in our markets, society, and technology has rendered a lot of the more specific information dated and worthless.
issued an updated version in:
For example, Zweig specifically mentions the crash in Amazon stock values—which looks pretty silly now as anyone who rode out the whole cycle would have made a fortune, let alone anyone who jumped in in 2002.
Correspondingly I have decided it was time to return to the themes of The Intelligent Investor but bring the advice up to date.
Graham expounds on the correct ratio of bonds versus stocks and draws on the experiences of the nineteen fifties and sixties—their inflation records and stock market crashes.
The advice that he gives for a defensive investor to be 50% in bonds would have seen much of their value destroyed in the high inflation nineteen seventies, although shares also had bad periods in ‘73/’74.
What does the last 50 years tell us? We have almost doubled the data that Graham was working with, and what are the current trends? On the other hand, some of Graham’s advice is timeless—look for and buy value, and the rewards will come.
However, renowned proponents of this advice, such as Warren Buffett, have not always found it easy to put into practice.
(post- pandemic) in Japan in:
Sometimes you need immense patience and calm to follow Graham’s advice when everyone around you is making huge returns in a raging bull market.
But does it pay off, or would you have just missed the investment returns of your lifetime? Everyone wants to know what the future will hold and predict where markets are going.
Up or down? Is it the bottom or the top? Will we have deflation or inflation or even hyperinflation?
