Repost: Benjamin Graham: The Intelligent Investor

Warren Buffett read the first edition of The Intelligent Investor by Benjamin graham in 1950 when he was 19. At the time he thought that it was by far the best book ever written. Writing in the introduction to this recent edition, he states that still thinks that it is.
This is reinforced by his comment in the 2003 annual report of Berkshire Hathaway where he declared that it is his favorite book. Since it was first published in 1949, Graham's investment guide has sold over a million copies. In its new form—with commentary on each chapter and extensive footnotes prepared by senior Money editor, Jason Zweig—the classic is now updated in light of changes in investment vehicles and market activities since 1972. You can purchase the book at Amazon.com.
The following summary notes were prepared by Jim Butler and kindly made available by him to subscribers of Conscious Investor.

(I)   Core principles [page xiii]

1. A stock represents an ownership interest in an actual business with an underlying value that does not depend on its share price.
2. The market is a pendulum that swings between optimism (making stock too expensive) and pessimism (too cheap).
3. The future value of every investment is a function of its present price. The higher the price you pay, the lower your return.
4. No matter how careful you are, you need a margin of safety--never overpaying after considering all risks.
5. The secret of financial success is inside yourself.

• 1. be a critical thinker
• 2. invest with patient confidence

II. Introduction [p 1]

1. The underlying principles of sound investment should not alter from decade to decade, but the application of these principles must be adapted to significant changes in the financial mechanisms and climate. [p 4]
2. Two types of investor [p 6]:
• Defensive 
• chief aim is avoiding losses
• secondary is low effort & annoyance and infrequent decisions

• Enterprising (active or aggressive)
• determining trait is willingness to devote time and care to selection of securities
• seeking a slightly better return (because expecting significantly better returns is probably unrealistic)