Below are my reflections and answers to the discussion questions posted at Modern Graham for chapter 10 – The Investor and His Advisers – of the Intelligent Investor written by Benjamin Graham.
1. What quote from this chapter do you think best summarizes the point Graham is making?
“Our basic thesis is this: If the investor is to rely chiefly on the advice of others in handling his funds, then either he must limit himself and his advisers strictly to standard, conservative, and even unimaginative forms of investment, or he must have an unusually intimate and favorable knowledge of the person who is going to direct his funds into other channels.”
2. Do you rely on any investment advisers? To what sources do you turn in your investment research?
No, I do not rely on any investment advisers. I haven’t done before and I’m not planning to do it either, at least not at the moment.
Sources for my investment research are original documents in the form of annual and quarterly reports, 10-K’s and 10-Q’s and earnings calls or transcripts etc. I sometimes use Morningstar.com when I want to get a quick glance at the financials and key ratios, this without seeing the share price. I manage to do this by having the financials section key ratios page for some small or unknown company as a bookmark, and then searching the ticker field from this page, which takes me directly to the same page for the company I want to look up. Beware anchoring bias. I also use the Swedish site Borsdata.se to get a quick look at the financial numbers for companies listed in Sweden.
Also regularly follow a few investment blogs.
3. If you are an investment adviser, what is your response to Graham’s points here?
Not an investment adviser myself, so not applicable.
4. What did you think of the chapter overall?
A good walkthrough of the different kinds of advisers working in the field of investing, and also what an investor should consider when thinking about using their services.