The Book in 3 Sentences
Buy a diversified basket of low-cost index funds
Defensive investor is someone who builds a permanent autopilot portfolio with index funds as its heart and core, that liberates him from forecasting what the market is going to do, as the most powerful answer to every market question is: I don’t know and I don’t care.
Margin of safety
Top Quotes
People who invest make money for themselves, people who speculate make money for their brokers.
Life can only be understood backwards, but it must be lived forwards.
A great company is not a great investment if you pay too much for the stock. When stocks grow faster than companies, investors always end up sorry.
Summary & Reflection
Investment vs speculation
What does it mean by being “intelligent”?
This kind of intelligence has nothing to do with IQ, it simply means being patient, disciplined and eager to learn, in fact it is a trait of character than of the brain.
According to Graham, the definition of investing should promise the safety of principle and an adequate return, not extraordinary.
The investor and inflation
Inflation is so easy to overlook, so it’s important to measure the investment success not just by what you make, but how much you make after inflation.
REITs is a inflation-fighter, why?
- Rents tend to rise with inflation. During inflation, landlords can often increase rents, especially in residential and commercial leases with short durations
- Property values tend to go up due to the rising replacement costs (materials, labor, construction).
The investor and market fluctuations
Do not be the slave of Mr.Market, if your investment horizon is long, at least 25 or 30 years, then there is only one sensible approach: Buy every month, automatically, and whenever you can spare some money. The single best choice for the lifelong holding is a total stock-market index fund, and sell only when you need cash.
The investor and his advisors
Despite of different types of financial advisors, the question is do you need help? If yes, trust then verify, but the reality is no real good advisor will take you if you have less than $100,000 to invest.
Who is your enemy? Your advisor should protect you from your worst enemy - yourself. You hire an advisor not to manage your money but to manage you.
Reflected on: 2025-07-09