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This is the first installment of a two-part conversation featuring Jason Zweig, arguably the greatest financial writer of all time.
You may know him from his column, The Intelligent Investor, in the Wall Street Journal. Prior to joining WSJ, Jason helped Nobel Laureate Daniel Kahneman write his massive best-selling book: Thinking, Fast and Slow. Before that, Jason was a senior writer for Money magazine and a guest columnist for Time magazine and cnn.com.
If that weren’t enough, Jason is the author of Your Money & Your Brain (on the neuroscience of investing) as well as The Devil’s Financial Dictionary (a satirical glossary of Wall Street). He is also the editor of Benjamin Graham’s investment classic, The Intelligent Investor, a book Warren Buffett has described as “by far the best book about investing ever written.”
This episode marks the release of the third edition of The Intelligent Investor, a book that has guided countless investors since its original publication in 1949.
In this special episode, we’re recording on the floor of the New York Stock Exchange, a place with a rich history in finance and a backdrop that embodies both the allure and volatility of the markets. I can’t think of a better place to be speaking with Jason on why the core principles of The Intelligent Investor remain essential in navigating today’s financial markets.
These are the notes from my conversation.
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Why The Intelligent Investor Is More Relevant Than Ever [01:41]
While technology has made markets more accessible, it has also introduced new challenges that Graham couldn’t have anticipated in 1949. The ability to invest from our phones, coupled with the barrage of notifications and market updates, often fuels impulsive decisions and distracts us from the fundamental purpose of investing: long-term wealth building.
Jason explains that while today’s investors have unparalleled access to tools and information, this ease also amplifies emotional reactions and short-term thinking.
When Graham originally published The Intelligent Investor in 1949, stock prices were less accessible and trading was a more deliberate, slower process. Today, we’re surrounded by screens and notifications that create the illusion that markets demand our constant attention and action. This heightened connectivity can make it difficult for investors to see stock prices as indicators of underlying business values rather than just numbers on a screen.
Jason emphasizes that Graham’s core philosophy—focusing on long-term objectives, adopting a disciplined strategy, and ignoring the noise of daily market fluctuations—remains as relevant as ever, perhaps even more so given today’s environment.
The Responsibility of Revising a Classic [03:39]
Updating The Intelligent Investor, widely regarded as one of the most influential investing books of all time, is no small task. Jason describes the responsibility of updating the work of a figure as impactful as Benjamin Graham, often called the “father of value investing” and a mentor to Warren Buffett, as both intellectually stimulating and humbling.
Jason explains that when he first took on the project for the 2003 edition, his goal was to maintain Graham’s foundational text completely intact, adding context through annotations and chapter commentaries rather than altering the author’s words. This approach allowed readers to experience Graham’s insights directly while also benefiting from modern examples and explanations that made the text more accessible and relevant.
For this latest edition, Zweig took a fresh approach, revisiting Graham’s writing as if for the first time. He printed out each of Graham’s chapters, read them without referencing his previous commentary, and approached the material with a blank slate. This allowed him to engage deeply with Graham’s ideas and ask himself how he would interpret them today, in light of major events like the financial crisis of 2008, the COVID-19 crash, and the meme-stock frenzy.
With this in mind, he approached the revision not as an attempt to modernize Graham’s views, but as a way to make them resonate within today’s market context, honoring the timelessness of Graham’s principles while making them accessible to contemporary readers.
Meet Mr. Market: The Provider of Options, Not Opportunities [07:30]
One of The Intelligent Investor’s most enduring metaphors is “Mr. Market,” Benjamin Graham’s imaginative portrayal of the stock market as a moody, irrational neighbor who swings from extreme optimism to despair, offering to buy or sell shares at wildly fluctuating prices.
Mr. Market is meant to embody the emotional and often irrational nature of market participants—a character who knocks on your door daily, offering prices based on his own volatile mood rather than the intrinsic value of the business.
Graham’s point is that while Mr. Market shows up each day with a price, there’s no obligation to transact with him. On some days, he’s euphoric, offering an inflated price for your business. Other days, he’s deeply pessimistic, quoting a bargain-basement price that undercuts the true worth of your assets. Yet, as tempting as his offers might seem, Graham wants investors to remember that they have a choice: they can ignore Mr. Market when his prices don’t align with their understanding of value.
This metaphor is especially relevant today, as modern technology has put Mr. Market in our pockets, ready to offer us his “advice” at any moment via apps and notifications. The immediacy of stock price updates can make it difficult for investors to separate their emotions from their actions. Rather than viewing price changes as directives, investors can instead see them as opportunities to make thoughtful choices based on their long-term goals.
Graham’s wisdom here is subtle yet profound: while the market offers prices every day, investors have the choice—but not the requirement—to act on them.
Reacting impulsively can lead to costly mistakes. When investors view price changes as “calls to action” rather than “options to consider,” they often end up trapped in a cycle of overtrading, chasing trends, or abandoning well-laid plans for short-term excitement or fear-driven moves.
Ultimately, Graham’s wisdom encourages a shift in mindset: the market is there to serve you, not to command you.
By treating price movements as options rather than obligations, investors gain the freedom to act on their own terms, engaging thoughtfully and strategically rather than reactively. This approach is key to building a resilient, long-term investment strategy that withstands the market’s inevitable volatility, allowing investors to stay focused on their goals regardless of the market’s daily drama.
Human Nature and Its Impact on Investing [13:55]
One of the recurring themes in Benjamin Graham’s The Intelligent Investor is the role human nature plays in shaping investment behavior.
Jason emphasizes that while markets, technology, and investment options have evolved drastically over time, human psychology remains remarkably unchanged. This constancy of human nature—our emotional responses to risk, reward, fear, and greed—continues to drive many of the poor investment decisions that derail long-term success.
Historically, investors have often treated the stock market as a platform for gambling, jumping from one “hot stock” to the next, rather than as a place to build long-term wealth through measured, disciplined decisions. This behavior has defined market manias for centuries, from the Dutch tulip bulb craze of the 17th century to the recent meme stock frenzy. But modern technology has amplified these emotional responses, putting the power to trade instantly at our fingertips.
Our evolutionary wiring is partly to blame. Humans are programmed to react to perceived threats and opportunities, an instinct that once helped us survive in the wild. However, in the context of investing, this survival instinct can lead us to make counterproductive decisions.
For instance, when markets decline, our “fight or flight” response often tempts us to flee to cash or “safe” assets, even though history shows that markets tend to recover over time. Similarly, when the market is booming, our fear of missing out (FOMO) can lead us to chase high-flying stocks, often at inflated prices.
Jason notes that while human nature won’t change, we can manage its impact on our investments by embracing a disciplined approach grounded in Graham’s principles.
By establishing clear rules and guidelines—such as setting an investment policy, diversifying, and rebalancing—investors can reduce the influence of emotion and make more rational, objective decisions. These structures act as guardrails, helping investors stay on course even when their instincts urge them to deviate.
Jason also points out that the more knowledge investors have about their own psychological tendencies, the better equipped they are to avoid costly mistakes. For example, by understanding that loss aversion makes losses feel twice as painful as gains feel rewarding, investors can prepare themselves emotionally to ride out market downturns instead of selling in panic.
Value Investing in a Changing World [18:12]
Value investing, the bedrock of Benjamin Graham’s philosophy, is built on a straightforward principle: buying undervalued assets that trade below their intrinsic worth.
Historically, value investing has delivered attractive returns by focusing on assets that are “cheap” relative to their fundamentals—whether that means a low price-to-earnings ratio, a high book value, or other indicators of intrinsic worth. Graham championed value investing as a disciplined approach that minimizes risk by prioritizing tangible assets and real earnings potential.
This approach has faced challenges in the last decade, with value stocks often lagging behind high-growth, tech-driven companies that dominate today’s market. Jason suggests that low interest rates and rapid technological advancement has created an environment where investors are willing to pay a premium for companies with high growth potential, betting that these firms will dominate the future economy.
Another notable development for value investing today is the rise of quantitative investing and factor-based strategies that use sophisticated algorithms and data analytics to identify undervalued stocks systematically. This development has broadened the scope of value investing, but also intensified competition. We also touch on the potential impact of artificial intelligence and machine learning, which some speculate could permanently alter the investing landscape.
Jason argues that Graham’s emphasis on buying assets at a discount to their true worth remains a sound strategy, particularly for those with a long-term outlook. As he puts it, value investing may evolve, but its core tenet of buying good assets at reasonable prices remains a time-tested approach to building wealth—especially for those who have the patience to wait for the market to eventually recognize the intrinsic worth of what they hold.
Jason also reminds us that while market conditions may favor growth stocks for extended periods, no strategy is invincible, and no trend lasts forever. Value investing is still working quite well outside the US and Jason suggests that US value investing’s underperformance in recent years could set the stage for a resurgence, as market sentiment inevitably shifts and investors return to fundamentals.
Helping Investors Think Differently [23:12]
For Jason, one of the most important roles of a financial journalist is to encourage investors to think differently.
People are frequently drawn to information that aligns with their preexisting views, a tendency known as confirmation bias. As Jason explains, this echo chamber effect can be dangerous, as it reinforces blind spots and encourages a narrow view of investing. By contrast, he views his column as a tool to gently disrupt this cycle, prompting readers to explore new ideas, question assumptions, and consider perspectives that might initially feel uncomfortable or unfamiliar.
One way of doing that is to present readers with truths they may not want to hear. For example, while the financial industry often emphasizes short-term returns or “winning” investment strategies, but Jason sees part of his mission as helping investors understand that wealth-building is a slow, steady process, often more about avoiding big mistakes than achieving extraordinary gains.
Ultimately, Jason’s goal is not to provide definitive answers but to inspire critical thinking.
He encourages readers to question not only the market and their investments but also their own behaviors, biases, and decision-making processes. By cultivating this mindset, Zweig believes investors can gain a greater sense of control, independence, and resilience in the face of market fluctuations. His message is clear: successful investing is less about being “right” in the short term and more about understanding oneself and making disciplined choices that align with long-term goals.
Jason explains that his personal goal is always to reach at least one reader, even if only one, and make a difference in their financial mindset.
Behavioral Insights for Financial Advisors [26:35]
Jason believes that financial advisors who grasp behavioral finance can better guide clients through emotional decisions, ultimately helping them meet long-term goals. Poor choices—like panic-selling or chasing “hot” investments—can have a significant impact on wealth over time, far beyond minor returns adjustments.
While advisors typically focus on asset allocation or costs, the real risk often lies in client behavior, which can impact returns by entire percentage points. Managing this is challenging, as advisors face similar biases, making self-awareness essential. Jason suggests that by recognizing their own biases, advisors can better support clients and build trust.
We discussed the value of a structured, rules-based investment plan, which involves setting a clear strategy and educating clients on its benefits. Jason emphasizes understanding each client’s unique fears and aspirations, tailoring guidance accordingly. For instance, a client sensitive to market swings may need reassurance, while an overconfident client might benefit from reminders of past corrections.
Another behavioral challenge arises when clients pursue unrealistic goals, like outsized returns or perfect market timing. Advisors play a crucial role in setting realistic expectations and distinguishing investing from speculating. In a culture that celebrates rapid wealth, advisors who educate clients on disciplined investing help them avoid speculative risks.
Jason believes that advisors who integrate behavioral insights offer more than portfolio management—they build a foundation for financial resilience. By understanding investment psychology, advisors guide clients to make choices that support their goals, even amid emotional and market turmoil, fostering trust and stability.
What It Means to Be an Intelligent Investor [33:47]
The title of Benjamin Graham’s The Intelligent Investor can be misleading, as it’s not about IQ but traits like patience, discipline, and a commitment to long-term thinking. Intelligence here is more about wisdom and temperament than intellect.
The intelligent investor doesn’t predict market moves but has the emotional control to follow a sound strategy despite uncertainty. A key aspect is embracing simplicity—avoiding pressure to overanalyze or chase every opportunity. Instead, they follow a disciplined approach, holding quality assets for the long term.
Graham’s definition includes humility, recognizing the market’s unpredictability. This translates to a measured approach, often avoiding high-risk strategies. To Graham, investing is not about outsmarting others but about protecting against mistakes, steadily building wealth over time.
Jason explains that intelligent investors view the market realistically—as a place to build wealth gradually, not to get rich quickly. They don’t expect guaranteed returns and are less swayed by market ups and downs.
Another mark of intelligence, according to Jason, is independence. Intelligent investors resist the urge to follow the crowd, especially in times of speculative frenzy or panic. Graham’s “Mr. Market” metaphor reminds them to make decisions based on personal goals, not herd mentality.Ultimately, Jason sees intelligent investing as a practice. It’s about cultivating habits that help investors focus on long-term goals, adapt through market cycles, and stay steady. Graham’s approach offers tools for navigating the market’s complexities with calm and clarity.
Resources:
- The Intelligent Investor
- Thinking, Fast and Slow
- Your Money & Your Brain
- The Devil’s Financial Dictionary
- Confirmation Bias
The Long Term Investor audio is edited by the team at The Podcast Consultant
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