Ben Graham was a security analyst and teacher in the 1930s. Warren Buffett took classes from him.
I think Mr. Graham was the first to use the term margin of safety as it applied to the financial markets < and which is part of this websites' title >. Simply stated, margin of safety is the difference between the "intrinsic value" of a security < stock, bond > and its' market price. What that meant for Ben was that you buy a stock selling for less then what its' assets < minus liabilities > are worth. If you really want to be safe, you should buy it below its' net current asset value, which is the amount of cash and cash equivalents left over after subtracting liabilities.
In the 1930s depression, there were many stocks that sold for these prices. This may give you an idea of how far these markets could possibly fall.
The Intelligent Investor was one of the first financial books Guido ever read. He has never since regretted it. Though it's maxims and rules have been a great help over the years in confusing markets < which is most years >, Guido has not found any investments for the last twenty years or so which would fit its' criteria. Again, this may give you an idea of how crazy things have become.
Warren Buffett's Berkshire Hathaway does not follow Ben Graham's rules, as Mr Buffett himself has stated publicly. Of course this is probably obvious from Mr. Buffetts' recent adventures in the derivatives markets, which accounted for part of Bershires' 40%+ loss in 2008. < This year, as I understand, Warren is trying recoup some of these losses again using derivatives > Ben Graham would probably call derivatives like Collateralized Debt Obligations, etc, a 21st century version of the assignats issued during the French Revolution < Ben originally used this word to describe stock options >. Basically these assignats were printed paper with no underlying assets backing their "value", except the illusory resources of the French government. Sort of like the US dollar today.
In other words, a stock certificate is part ownership in a business that has assets. Title to real real estate is ownership in a piece of property < land, house, etc. > less any mortgage liability < which many times today means you may have something of no value >. Stock options have no value / assets beneath them. After they expire, they are worthless. Financial derivatives are the same, usually several dimensions further removed from reality.
The Intelligent Investor is mainly just common sense. Mr. Graham can be a very entertaining narrator and scatters several profound quotes throughout his book. Step by step he shows the process of a evaluating an investment. And why if one idea isn't good, he implies, there are an infinite array of other choices.
After reading his book, some have come away thinking he is fundamentally advising people to buy bonds. Mr. Graham does devote some time to discussing these investments. And he did advocate their purchase if no better choices were available. Just like some people are doing today.
Whatever your preference and inclination, it wouldn't hurt to read what Mr. Graham had to say.
"Ben may never have made much money for many people. But he never made anyone poor." - Warren Buffett
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