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Everyday to do something foolish, something creative and something generous

A stock is an ownership interest in an actual business, with an underlying value that does not depend on its share price.
• The market is a pendulum that forever swings between unsustainable optimism (which makes stocks too expensive) and unjustified pessimism (which makes them too cheap). The intelligent investor is a realist who sells to optimists and buys from pessimists.

• The future value of every investment is a function of its present price. The higher the price you pay, the lower your return will be.

• No matter how careful you are, the one risk no investor can ever eliminate is the risk of being wrong. Only by insisting on what Graham called the “margin of safety”—never overpaying, no matter how exciting an investment seems to be—can you minimize your odds of error.

• The secret to your financial success is inside yourself. If you become a critical thinker who takes no Wall Street “fact” on faith, and you invest with patient confidence, you can take steady advantage of even the worst bear markets. By developing your discipline and courage, you can refuse to let other people’s mood swings govern your financial destiny. In the end, how your investments behave is much less important than how you behave.

Intelligence simply means being patient, disciplined and eager to learn. You must also be able to harness your emotions and think for yourself.

激情也许在其他场合都是好事，在华尔街绝对导致失败

如果所有人都认为投资一个行业是如此的显而易见，那么他的股价必然高到不值得购买的地步

(1)speculating when you think you are investing; (2) speculating seriously instead of as a pastime, when you lack proper knowledge and skill for it; and (3) risking more money in speculation than you can afford to lose.

Buy cheap and sell dear is different from Wall Street idea that stocks should be bought because they have gone up and sold because they have gone down.

All of human unhappiness comes from one single thing: not knowing how to remain at rest in a room.               —Blaise Pascal  这话委实有点意思！

Graham’s definition of investing could not be clearer: “An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return.” 1 Note that investing, according to Graham, consists equally of three elements:
• you must thoroughly analyze a company, and the soundness of its underlying businesses, before you buy its stock;
• you must deliberately protect yourself against serious losses;
• you must aspire to “adequate,” not extraordinary, performance.

An investor calculates what a stock is worth, based on the value of its businesses. A speculator gambles that a stock will go up in price because somebody else will pay even more for it.

investors judge “the market price by established standards of value,” while speculators “base [their] standards of value upon the market price.” 

Graham urges you to invest only if you would be comfortable owning a stock even if you had no way of knowing its daily share price. “Ask yourself: If there was no market for these shares, would I be willing to have an investment in this company on these terms?

You must never delude yourself into thinking that you’re investing when you’re speculating.
• Speculating becomes mortally dangerous the moment you begin to take it seriously.
• You must put strict limits on the amount you are willing to wager.

The heart of Graham’s argument is that the intelligent investor must never forecast the future exclusively by extrapolating the past. 

The stock market’s performance depends on three factors:
• real growth (the rise of companies’ earnings and dividends)
• inflationary growth (the general rise of prices throughout the economy)
• speculative growth—or decline (any increase or decrease in the investing public’s appetite for stocks)

The rate of return sought should be dependent, rather, on the amount of intelligent effort the investor is willing and able to bring to bear on his task.

For defensive investor通常情况下债券和股票的比例是50/50。牛市减持股票,熊市增持。而现实大部分人相反。考虑到现实的不确定性，本书推荐的是始终50/50价值比。也就是说，股票价值为55，restore到50/50.


The call feature in these bond contracts was a thinly disguised instance of “heads I win, tails you lose.”

Experience teaches that the time to buy preferred stocks is when their price is unduly depressed by temporary adversity. (At such times they may be well suited to the aggressive investor but too unconventional for the defensive investor.)

There are two ways to be an intelligent investor:
• by continually researching, selecting, and monitoring a dynamic mix of stocks, bonds, or mutual funds;
• or by creating a permanent portfolio that runs on autopilot and requires no further effort (but generates very little excitement).

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