Is "The Intelligent Investor" a good book for beginners?

[i4value]

I am a self-taught value investor learning how to invest from books, articles, videos and podcasts. I must say that if I had started with The Intelligent Investor, I might not be a value investor today.

I read "The Intelligent Investor" years after I learned value investing. I found the book hard to read and if I was not a value investor, I would not have read it. Many times I felt like falling asleep. It is sad thing to say since I read a lot investing articles and I am a book fan. Yes, I read it to find out what the hype was all about.

This is not a book I would recommended to any newbie wanting to learn value investing. There are better books nowadays that presents the value investing concepts better. Places like The Motley Fool or The Street have many simpler introduction to value investing.

Besides if you want to learn value investing, there are 3 skills you have to develop.

• how to analyze companies. This is like a mini-MBA course and I am sure there are better books for this than the Intelligent Investor.
  
• how to value them. Damodaran and Penman have much comprehensive books.
  
• how to mitigate risk from a permanent loss of capital perspective. I have not found any books on this and what I am doing is based on my own experience.
  

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So you can understand why I said that "The Intelligent Investor" is not meant for the newbies. If covers how to analyze stocks and bonds in those days when not many people were doing fundamental analysis. If you do such analysis today, you won't get any edge. But the concept of having to do fundamental analysis and having a margin of safety is correct.
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Of course, I like to think that my own value investing book is better for the newbies as I covered all the 3 skills with case studies and worked examples. Just have a look at the infographics based on the book and you will see what I mean. Do you really want to master value investing?

[Choon]

Do you teach a course on the same?

What are course fees?

[i4value]

I don't teach. But I have a value investing blog with case studies that is meant to be free materials for those who want to learn value investing. I taught myself value investing using free online resources. It took my about 2 years on a part-time basis (spending about an hour a day) before I considered myself skillful enough.

There are many free online resources on value investing today that you can use to teach yourself value investing without paying monies. But it takes time and effort. Self-study requires discipline.

In my blog I have actually compiled a list of URLs to free online value investing resources many of which I used to learn value investing. I have arranged them by level of skills as well as into several categories - company analysis, valuation and risk mitigation.

It is quite voluminous and as such I have broken them into 3 articles: I suggest that if anyone is interested, start with Baby Steps into the Investment Universe: Beginners: Part 1 of 3 ie go to https://www.i4value.asia/2020/09/baby-st....html#more

[¯|_(ツ)_/¯]

Thank you, ivalue.
I had spend a few hours at your blogs and I must says that it both innovative and quality work.  

In particular, I'm very impressed with the video clips that you bother to create.  That - to me - differentiate your blog among all the other bloggers that I followed.

In additional, the collage photo/tips/info is another very impressive works.  Again, it distinguish your blog from the rest of the bloggers.

---

My budding (financial) teacher was Christopher Ng.  We were from the same company and with similar technical background.  Not sure you have a chance to read them too? (Yes - I learn by reading his books).


After budding, I spend most of my time reading ShareInvestor book (previously owned by the late Dr Michael Leong).  

"The intelligeng investor" was a great book. I remember buying it from Orchard Road Kinokuniya.  As what many valuebuddies already know, chapter 8 and chapter 20 would be something everyone need to understand and take full advantages - which I benefited the most all these years.

Gratitude.


You had a nice blog. Keep it up!

[i4value]

Thank you, ivalue.
I had spend a few hours at your blogs and I must says that it both innovative and quality work.  

In particular, I'm very impressed with the video clips that you bother to create.  That - to me - differentiate your blog among all the other bloggers that I followed.

In additional, the collage photo/tips/info is another very impressive works.  Again, it distinguish your blog from the rest of the bloggers.

---

My budding (financial) teacher was Christopher Ng.  We were from the same company and with similar technical background.  Not sure you have a chance to read them too? (Yes - I learn by reading his books).


After budding, I spend most of my time reading ShareInvestor book (previously owned by the late Dr Michael Leong).  

"The intelligeng investor" was a great book. I remember buying it from Orchard Road Kinokuniya.  As what many valuebuddies already know, chapter 8 and chapter 20 would be something everyone need to understand and take full advantages - which I benefited the most all these years.

Gratitude.


You had a nice blog. Keep it up!

FYI, I started blogging because of Covid-19. I had nothing better to do. Then once it got started, I found it like a hobby. The sad part after talking to many is that in Malaysia, the traders (technical guys) have a bigger following than fundamental investors.

[weijian]

FYI, I started blogging because of Covid-19. I had nothing better to do. Then once it got started, I found it like a hobby. The sad part after talking to many is that in Malaysia, the traders (technical guys) have a bigger following than fundamental investors.

hi i4value,

Does the bolded part sounds like that the Msian equity market is pretty inefficient?

[i4value]

It depends on what you mean by "efficient". The standard definition of an efficient market is one where prices quickly reflect all available information. I would argue that information just don't come from the fundamental investors. Speculators and technical investors provide the "sentiments" information.

I always console myself that as a fundamental investor, I have a much easier task to beat the market where the bulk is made up of technical investors. I think long term whereas the technical guys are short term investors. So their fear and greed provides more buying and selling opportunities. But of course it requires great patience and holding power.

[¯|_(ツ)_/¯]

Thank you ivalue.

Fundamental investing makes a lot of sense to me too.  One of the side effect would be a longer life spend - which is important to many of our value buddies too.

If you have time, watch Eric Kong's video. I watch his youtube many years ago and I like his fundamental investing.  Do share your thought (if any). I'm still learning on value investing too.


Gratitude!

[i4value]

One of the problem with the stock market is that many see it as a place to make money quickly. That is why value investing has a small following as many don't find it "exciting" enough. For many investing is also about bragging rights and telling success stories. Value investing does not provide this in the short term. That is why technical analysis is so exciting. You can "tell" what is going to happen tomorroa

[weijian]

It depends on what you mean by "efficient". The standard definition of an efficient market is one where prices quickly reflect all available information. I would argue that information just don't come from the fundamental investors. Speculators and technical investors provide the "sentiments" information.

I always console myself that as a fundamental investor, I have a much easier task to beat the market where the bulk is made up of technical investors. I think long term whereas the technical guys are short term investors. So their fear and greed provides more buying and selling opportunities. But of course it requires great patience and holding power.

hi i4value,
My basic definition of an inefficient market is absence of an army of brilliant people (eg. hedge fund managers/arbs/sector specialists etc), regardless of whether they are fundamental/momentum. The lesser there are in terms of brilliant people competing against each other, the more inefficient the market will be.