Benjamin Graham, The Intelligent Investor, Harper and Brothers, 1949
Make no mistake, this is not one of those “How to beat the market” books. It’s pretty much a textbook, with graphs and charts and long complicated financial terms that you need to study as seriously as you studied for your college final exams if you’re really going to get anything out of it.
Graham is very clear from the start that he is not writing for speculators but for the layman who wants to have a sound approach to growing his wealth steadily. He believes that lay investors can achieve an above-average result by just buying and holding a representative list of stocks– which can equal the performance of the market average. Avoiding dancing in and out of the market.
Graham warns those who try to beat the market, as many smart people have tied to do and have failed. How he explained this makes a lot of sense – every active manager thinks he can outdo the market. That means the stock market experts as a whole are trying to beat themselves – a logical contradiction. They just cancel each other out.