The Intelligent Investor PDF
As with its predecessor Security Analysis from 1934, the content of the The Intelligent Investor PDF book is value investing, which Benjamin Graham founded together with others. Value investing is the clear opposite of speculative strategies such as "momentum trading" or "chart analysis". In its basic assumptions, it also clearly contradicts the view that share prices are efficient. In this context, efficient means that the market as a whole always knows all the necessary information about a company and can therefore always price it into its share prices immediately. The consequence would therefore be that there could be no mispricing of stocks and that the price of a stock would have to reflect the fundamental value of a company at all times (or at least in the vast majority of cases).
Graham vehemently contradicted this view. If a company's share price were reasonable and in line with its true value at all times, no one could ever benefit from the undervaluation of the market from time to time. It is argued by supporters of Graham today that the successes of Warren Buffett, who justifies his immense wealth growth precisely because he is repeatedly invested in undervalued companies, cannot be explained by efficiency theory.
Some advocates of the market efficiency hypothesis argue that Buffett is an absolute anomaly. Buffett himself countered that there were many others who achieved similar successes as they applied the principles of value investing as Graham once applied them. His now famous essay The Superinvestors of Graham-and-Doddsville is hard to refute evidence of the successful implementation of value investing by several individuals who all go back to the same “progenitor” (Ben Graham).