The Intelligent Investor by Benjamin Graham

Benjamin Graham The Intelligent Investor (1949, revised 1973 with Warren Buffett preface commentary) is the canonical text on value investing and the book Buffett calls the best book on investing ever written. The chapters on Mr. Market — the allegorical investor who offers to buy and sell securities every day at erratic prices driven by emotion — and on the margin of safety concept are foundational to understanding how to think about stock valuations. The honest caveat: this book is dense, dated in some specifics, and requires a reader who wants to actively analyze individual stocks. For index investors following Bogle and Malkiel advice, the specific tactics are less applicable. The conceptual value is universal: understanding what the stock market is (a machine that transfers money from the impatient to the patient) permanently changes your relationship to market volatility.